Amazon (AMZN) Up 2% After Crushing Q1 Estimates, New 'Street High' PT Implies Another 60% Upside

April 30, 2021 6:48 AM EDT
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Price: $3,291.61 -0.45%

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    55 Buy, 3 Hold, 1 Sell

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Shares of Amazon (NASDAQ: AMZN) are up 2% in early trading Friday after the e-commerce company delivered another impressive set of results for its first quarter.

AMZN made a profit of $15.79 per share to absolutely smash the $9.54 consensus from the Street. Revenue for the quarter was reported at 108.52 billion, up 44% year-over-year, to top the $104.47 billion expected from analysts. Region-wise, sales soared 60% internationally while the home US market saw rising sales by 40%.

Shares were also pushed higher by the confirmation that Prime Day will take place in June, which is likely to provide a boost to Q2 sales. Amazon Prime has over 200 million subscribers with over 170 million of them spending 70% more time to stream content, CEO Jeff Bezos said.

“In many areas, July is vacation month, so it might be better for customers, sellers and vendors to experiment with a different time period. We believe that it might be better timing later in [the second quarter], so that’s what we’re testing this year,” CFO Brian Olsavsky said.

The company’s cloud business AWS generated $13.5 billion in sales to mark a 32% rise in YoY sales.

“In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating—up 32% year over year. Companies from Airbnb to McDonald’s to Volkswagen come to AWS because we offer what is by far the broadest set of tools and services available, and we continue to invent relentlessly on their behalf,” CEO and founder, Jeff Bezos, wrote in a statement.

Looking forward, Amazon is expecting operating income to come between $4.5 billion and $8 billion, while it forecasts sales between $110 billion and $116 billion in Q2 to beat the $108.6 billion consensus.

BMO analyst Daniel Salmon hiked the price target on AMZN stock to $4,300 per share from $4,200 following another strong quarter.

“Recent years' accelerated levels of investment in fulfillment and logistics have left AMZN in the enviable position of being able to handle holiday-season level volumes everyday, which should help keep competitive concerns at bay. Even if 2021 doesn't prove to be a harvest year, it looks increasingly clear that the business can operate at a higher level of profitability as COVID-19 costs ease and flywheel dynamics drive likely permanent efficiencies, especially in international markets. We think shares can grind higher from here as this narrative takes hold through 2021,” he wrote in a note.

AMZN delivered another “impressive quarter,” which ultimately translated into a Street-high PT of $5,500 per share (up from $5,300) set by Susquehanna analyst Shyam Patil. A new price target implies an upside of nearly 60% compared to yesterday’s closing price.

“Business trends remain strong and should continue to do so throughout 2021. Paid units growth was extremely strong again at 44% y/y, surprisingly only decelerating three points after a huge holiday season in 4Q. The 2Q guide was also nicely above expectations for revenue and profitability, partially driven by moving Prime Day to 2Q. Ultimately, we see AMZN as a long-term secular grower underpinned by its strong eCommerce, cloud, and advertising businesses,” the analyst said in a note sent to clients.

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