Amazon Stock Has a Bright Future Despite Capacity Issues, Says Top Analyst

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Amazon Stock Has a Bright Future Despite Capacity Issues, Says Top Analyst

TipRanks2022-06-07

Amazon’s (AMZN) latest quarterly report was marred by the rising costs related to operational issues. Namely, the investments the company has made in both expanding the workforce and building out ...

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Wtt
·2022-06-07
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MSTAN
·2022-06-07
👍👍
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blessed_1
·2022-06-07
Ok
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DarkFate
·2022-06-07
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Anilgn76
·2022-06-07
Fantastic long growth stock!
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godo PWR
·2022-06-07
Hi
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Namely, the investments the company has made in both expanding the workforce and building out ...</p>\n\n<a href=\"https://finance.yahoo.com/news/amazon-stock-bright-future-despite-181538931.html\">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":"AMZN","symbol_name":"亚马逊","start_time":0,"source_url":"https://finance.yahoo.com/news/amazon-stock-bright-future-despite-181538931.html","article_id":"2241069289","we_media_id":null,"thumbnails":[],"rights":{"source":null,"url":"https://finance.yahoo.com/news/amazon-stock-bright-future-despite-181538931.html","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2241069289","pubTimestamp":1654571416,"sourceInfo":null,"weMediaInfo":null,"summary":"Amazon’s (AMZN) latest quarterly report was marred by the rising costs related to operational issues","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AMZN":"亚马逊"},"translate_title":"顶级分析师表示，尽管存在产能问题，亚马逊股票仍有光明的未来","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMZN":1},"content_text":"Amazon’s (AMZN) latest quarterly report was marred by the rising costs related to operational issues. Namely, the investments the company has made in both expanding the workforce and building out fulfillment capacity – with the ecommerce giant now having an excess of both.It has been suggested that on top of being hit with increasingly difficult macro conditions, Amazon misjudged the waning demand in a post-pandemic world.However, Evercore analyst Mark Mahaney seems more confident after hosting a call with Marc Wulfraat, President and Founder of MWPVL, a consulting firm that monitors Amazon’s growth.“We came away incrementally positive on Amazon’s ability to address its excess-capacity issue over the next 2-4 quarters, with our belief that 2 will be more likely than 4,” the 5-star analyst explained.To solve the issue, however, Amazon will need to make some changes. One will be to reduce the workforce to the tune of around 65,000 while also putting a pause on any hiring. Cutting back square footage growth expansion by 30 million square feet to 45 million could also be required and should take between 2-4 quarters (by Q1:23).“This sq. ft reduction is expected to come not only from existing and active buildings,” explained Mahaney, “but also from delaying or halting new capacity expansion projects.” According to Wulfraat’s tracking, Amazon has already walked back on 22 U.S. projects which add up to 8 million sq ft.Overall, considering the stock is currently trading at a 40% discount to its average historical EV/EBITDA multiple, the analyst believes most of the capacity issues are already “priced in.”As such, Amazon remains one of Mahaney’s “Top Longs in the Internet MegaCap sector.” The analyst sticks with an Outperform (i.e., Buy) rating on the stock, backed by a $205 price target. Should the figure be met, investors are looking at one-year upside of 62%.Almost all on the Street agree. 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