Cowen Boosts Amazon (AMZN) PT to $700; Accelerating Revenue, Strong Guidance Bolster Confidence
Cowen and Company lifts its price target on Outperform-rated Amazon.com (Nasdaq: AMZN) from $665 to $700 following strong Q2 results issued after markets closed on Thursday.
Analyst John Blackledge summarized, AMZN reported a break-out qtr with revs beating the high-end of guidance and 2 percent above our est. driven by accelerating EGM and AWS topline growth, while margins shined with GM's 90bps and adj. op inc. 200bps above forecast. 3Q15 revenue and adj. op. inc. crushed our and street pre-print estimates.
Blackledge noted, AWS revenue of $1.82 billion was up 82 percent y/y, 10 percent above our Cowen estimate and 16 percent above Consensus. Mgmt. commented that usage growth was a key driver, growing above the rate of revenue. Additionally, results benefited from a more stable pricing environment as AWS lapped year-ago price cuts. CSOI (adj. op. inc.) was $391MM, up 35 percent y/y, implying a 21 percent CSOI margin, up 13 percent y/y, and above our 17 percent estimate. Results suggest AWS holds a leadership position in Public Cloud...
On guidance: AMZN’s 3Q15 revenue guide of $23.3BN to $25.5BN, +13-24 percent y/y (or +20- 31 percent y/y x-FX), vs. our $24.0BN estimate and cons. $23.9BN est. pre-print, a huge rev. guide given AMZN has been at or above the high-end recently. CSOI guide of $100 million to $650 million was above our pre-print est. of $8 million and Consensus $230 million.
Cowen boosts its FY15 revenue and CSOI estimaes from $104.4 billion and $3 billion up to $106 billion and $4.5 billion, respectively.
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