It is time for the quarterly earnings announcement at Amazon.com (AMZN, Financial)
The U.S. commerce and cloud computing company is expected to release earnings for the first quarter of 2018 after the closing bell on Thursday. It is expected to post a lower earnings per share of $1.27 compared to the analogous quarter of 2017. At that time, the company posted earnings of $1.48 per share. The most optimistic analyst is forecasting $1.89 per share of Amazon while the lowest estimate on earnings is at $66 cents per share.
If earnings are forecasted to be slightly lower, revenue is instead predicted to grow 39.6% year-over-year to $49.87 billion. That is a mean of 41 estimates ranging from $48.87 billion to $51.01 billion. In the chart below, you can see the sturdy growth that has characterized Amazon’s first-quarter sales over the last five fiscal years:
Currently, sales are dropping net earnings at a 1.71% net margin rate, which is below the average of 2.36%.
GuruFocus gives Amazon’s ability to generate sales and remain profitable a rating of 7 out of 10. In coming years, analysts foresee that earnings will grow 85.30% from 2018 to 2019 and according to an average annual 20.48% growth rate over the next five years.
Revenues are projected to grow 21% to $281.806 billion in 2019 and 40.7% to $327.635 billion in 2020.
Concerning the balance sheet, GuruFocus assigns Amazon a financial strength rating of 6 out of 10.
The stock is trading at $1,527.49 per share and has grown 28% so far this year:
The stock has a price-earnings (P/E) ratio of 247.97 and a price-sales (P/S) ratio of 4.24. The industry has a price-sales ratio of 0.71. The price-book (P/B) ratio of Amazon is 26.68 versus an industry median of 1.73.
The share price is abundantly over the Peter Lynch Earnings Line (P/E = 15) and the Price at Med P/E without NRI (P/E = 87.36). This may be an indication of overvaluation.
During the first three months of 2018, Spiros Segalas reduced its holding of Amazon by 12.79% to 1,022,336 shares held.
The most prominent top institutional holder of the stock is the Vanguard Group, Inc. with 5.76% of Amazon shares outstanding.
(Disclosure: I have no positions in any security mentioned in this article.)
