Amazon: Pre-Pandemic Prices, Post-Pandemic Opportunity

seekingalpha2022-05-14

Noah Berger/Getty Images Entertainment Amazon (NASDAQ:AMZN) is down nearly 35% YTD and is reaching prices similar to pre-pandemic levels. Due to recent Q1 earnings and concerns with rising inflation ...

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YK Lim
2022-05-15
YK Lim
Good info. tks

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Due to recent Q1 earnings and concerns with rising inflation ...</p>\n\n<a href=\"https://seekingalpha.com/article/4511554-amazon-pre-pandemic-prices-post-pandemic-opportunity\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amazon: Pre-Pandemic Prices, Post-Pandemic Opportunity</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmazon: Pre-Pandemic Prices, Post-Pandemic Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-14 21:34 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4511554-amazon-pre-pandemic-prices-post-pandemic-opportunity><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Noah Berger/Getty Images Entertainment Amazon (NASDAQ:AMZN) is down nearly 35% YTD and is reaching prices similar to pre-pandemic levels. Due to recent Q1 earnings and concerns with rising inflation ...</p>\n\n<a href=\"https://seekingalpha.com/article/4511554-amazon-pre-pandemic-prices-post-pandemic-opportunity\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4535","symbol_name":"淡马锡持仓","start_time":0,"source_url":"https://seekingalpha.com/article/4511554-amazon-pre-pandemic-prices-post-pandemic-opportunity","article_id":"2235948863","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2235948863","pubTimestamp":1652535286,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Noah Berger/Getty Images Entertainment Amazon (NASDAQ:AMZN) is down nearly 35% YTD and is reaching p","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4535":"淡马锡持仓","BK4524":"宅经济概念","BK4527":"明星科技股","BK4559":"巴菲特持仓","BK4538":"云计算","BK4579":"人工智能","BK4550":"红杉资本持仓","BK4503":"景林资产持仓","BK4122":"互联网与直销零售","BK4551":"寇图资本持仓","BK4561":"索罗斯持仓","AMZN":"亚马逊","BK4581":"高盛持仓","BK4548":"巴美列捷福持仓","POST":"Post Holdings","BK4212":"包装食品与肉类","BK4532":"文艺复兴科技持仓","BK4554":"元宇宙及AR概念","BK4507":"流媒体概念","BK4534":"瑞士信贷持仓","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4566":"资本集团"},"translate_title":"亚马逊：疫情前的价格，疫情后的机会","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"POST":1,"AMZN":1},"content_text":"Noah Berger/Getty Images Entertainment Amazon (NASDAQ:AMZN) is down nearly 35% YTD and is reaching prices similar to pre-pandemic levels. Due to recent Q1 earnings and concerns with rising inflation and interest rates, many investors are selling Amazon and moving away from the tech sector. However, the Q1 report had little information that was not to be expected and AWS continues to prosper. Combine this with Amazon's undervaluation, and it may become an attractive choice for many investors. Data by YCharts Amazon's Price is Undervalued and Becoming an Attractive Choice In January of 2020, Amazon's price was just about $2135 per share. In July of 2021, Amazon's stock peaked at just over $3700 per share. Since then, the stock has dropped about 40% down to just over $2200, only about 4% higher than the pre-pandemic price. There are two major reasons for this. The first is that many tech companies are being sold off due to high inflation and rising interest rates. This has caused many investors to want to move away from these securities and into more defensive companies.  Data by YCharts The second reason is Amazon's recent Q1 earnings report, which many investors saw as devastating. As a quick overview, the company's earnings were reported at $7.38 per share ($8.36 expected) and advertising revenue was only $7.88 billion ($8.17 billion expected). Furthermore, a $7.6 billion loss on its Rivian (RIVN) investment was recorded due to the electric vehicle company losing over half its value in Q1. Due to all of this, Amazon recorded a total net loss of $3.8 billion. Revenue growth also slowed down with only a 7% increase, compared to 44% in 1Q21. The company forecasts that revenue could slow down even further to as low as 3% growth in the next quarter of 2022. First Quarter Earnings Reactions Are Overblown To begin, Amazon's lower EPS was to be expected. Rising gas prices from the Russia-Ukraine conflict, rising inflation and interest rates, and supply chain issues have been well-known events for months now. As for the loss on its Rivian investment, the company's investment has been known publicly for months. With Rivian being public and investors able to see its drop in share price, investors already knew to expect a huge loss from this investment. Data by YCharts In 4Q21, Amazon's guidance for 1Q22 was accurate. Specifically, the company said it expects operating income to between $3 and $6 billion and revenue to grow between 3% and 8%. The company actually recorded $3.67 billion in operating income, and 7% growth in revenue. With all of the headwinds Amazon was going to face already being known and Q4 guidance being accurate with actual Q1 results, the nearly 25% drop in share price Amazon has experienced since the report seems quite overblown. AWS Continues to Be the Biggest Name in Cloud Services Since many investors are focusing on the bad aspects of the Q1 report, many are ignoring the great performance AWS posted. AWS recorded over $18 billion in revenue in the first quarter, which is a 36.5% increase from just one year earlier. The operating income of this segment also increased by an impressive 57% to $6.5 billion.  Market Share of Cloud Services (Future Processing) AWS already is a clear winner in market share for cloud services and one of their largest competitors, Google Cloud (GOOG) (GOOGL), is not performing as well. Although the sales of Google Cloud grew by 43% in Q1, it has yet to be profitable and is experiencing worse-than-expected operating losses.  Operating Margins of AWS vs. Google Cloud (Created by Author) The Upcoming Stock Split and Current Undervaluation Help Amazon's Case In March, Amazon announced a 20-for-1 stock split and $10 billion share buyback. This stock split will not affect the underlying fundamentals or value of Amazon but will make it purchasable by more investors. If this stock split were to happen right now, Amazon's share price would go from $2200 per share to about $110 and give each shareholder an additional 19 shares of the company. This stock split is set to happen for current shareholders at the end of business on June 3, and trading starts at the new price on June 6. Data by YCharts3 Year Median Ratios vs. LTM Ratios Amazon's valuation multiples are far below where they've historically been in previous years. After combining these ratios with analyst consensus estimates of revenue, earnings, and EBITDA for FY23 and adjusting for the company's cash and debt to arrive at market cap, a price target of $4015.44 can be calculated before the stock split. Price Targets of AMZN What Should Investors Do? Amazon's Q1 earnings report contained information that was not very surprising, yet investors were quick to sell and drop the company's share price by nearly 25%. However, AWS continues to dominate the cloud industry and holds a huge lead in market share. Google Cloud, one of the main competitors of AWS, cannot seem to achieve an operating profit despite growing revenues. Combine all of this with the fact that Amazon stock appears to be deeply undervalued, and I believe applying a Buy rating is appropriate for now.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9020949871,"gmtCreate":1652574479194,"gmtModify":1676535121271,"author":{"id":"4104646697158940","authorId":"4104646697158940","name":"YK Lim","avatar":"https://community-static.tradeup.com/news/461a746573fd08d26edd4c30fa270ab0","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"4104646697158940","authorIdStr":"4104646697158940"},"htmlText":"Good info. tks","listText":"Good info. tks","text":"Good info. tks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9020949871","repostId":2235948863,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":5,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2235948863"}