Amazon (AMZN) PT Raised to $1250 at Susquehanna
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Susquehanna analyst Shyam Patil reiterated a Positive rating and raised his price target on Amazon.com (NASDAQ: AMZN) to $1,250.00 (from $950.00), saying 'we've seen this movie before."
- Our thoughts going forward and upcoming catalysts. Near-term profitability will be the main topic of discussion given the 3Q CSOI miss and lower than expected 4Q guide. The investment is heavier than normal and is likely to persist (though remain lumpy), but makes sense given the large secular e-commerce and cloud opportunities in front of the company. We remain Positive and believe over time the bias to estimates is to the upside. Catalysts include intra-quarter ChannelAdvisor data, company-specific events (such as the AWS summits), AWS product announcements and pricing decisions, and quarterly results.
- 3Q revenue in-line but CSOI misses. 3Q revenue grew 29% y/y, in-line with us and consensus, with international outperforming, NA slightly below, and AWS remaining strong. Gross profit beat us by 1% but was in-line with consensus. CSOI came in 9% below us and 6% below consensus, as AMZN invested aggressively in several areas, including new fulfillment centers (18 new FCs in 3Q alone), Prime video, and India.
- Revenue guide was fine but CSOI points to more investment. AMZN guided 4Q16 revenue to $43.75b at the midpoint ($42.0b-$45.5b), which bracketed our estimate and consensus. The high end of CSOI looks to be ~$2.1b ($1.25b GAAP CSOI + our estimate of ~$820m in SBC and other opex), which compares to our previous estimate of $2.2b and consensus of $2.5b, as AMZN plans to be more aggressive than expected in investing in digital content, fulfillment centers, and India in 4Q. That said, we would note that AMZN has tended to outperform the high end of its CSOI guidance, doing so in five of the last seven quarters.
Shares of Amazon.com closed at $818.36 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesSusquehanna International Group of Companies
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