Wedbush Remains Bullish on Amazon.com (AMZN) Following 3Q
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Wedbush reiterated an Outperform rating and $900.00 price target on Amazon.com (NASDAQ: AMZN) following the company's 3Q earnings report. Revenue was $32.71 billion vs. the consensus of $32.69 billion, and guidance of $31.0 – 33.5 billion. EPS was $0.52 vs. the consensus of $0.78. 2016 EPS estimate were reduced to $5.06 from $6.00 prior, and operating income to $1.26 billion from $1.45 billion, to reflect Q3 results.
Analyst Michael Pachter commented, "Despite disappointing earnings and guidance, Amazon is still delivering substantial earnings growth. While the outlook for FY:16 has been tempered, the company’s outsized earnings beats in 1H:16 and still meaningful y-o-y EPS growth in Q3 are a signal that Amazon remains focused on growing profits despite the quarterly variability. Amazon Web Services’ (“AWS”) gross and operating margins have grown as revenues continue to ramp, the mix of Fulfillment by Amazon (“FBA”) and AWS is likely to drive further gross margin expansion, and Prime membership growth has continued unabated. We expect the monthly Prime subscription offering to bolster the number of Prime customers seasonally, particularly around the holidays, and although gross margin expansion is being offset by its increased video content spending, the trajectory is clear and investment strategy purposeful."
Shares of Amazon.com closed at $818.36 yesterday.
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