Amazon (NASDAQ: AMZN) is set to reveal its fiscal Q1 2024 results on April 30, 2024. Market analysts anticipate Amazon to surpass the consensus estimates for earnings and revenues, building on its remarkable performance in the previous quarter.
Riding the Stock Market Rollercoaster
Despite the financial climate, Amazon stock has displayed little fluctuation, meandering from roughly $165 in early 2021 to around $180 currently. However, this journey pales in comparison to the S&P 500’s robust 35% surge over the same period. The stock’s history has seen varied returns – 2% in 2021, a steep decline of 50% in 2022, followed by an impressive 81% rise in 2023.
Contrasting with the S&P 500’s performance, Amazon battled to outshine the index during 2021 and 2022. This uphill task mirrors the challenges faced by other titans in the Consumer Discretionary sector such as TSLA, TM, HD, as well as tech giants like GOOG, MSFT, and AAPL. In stark contrast, the Trefis High-Quality Portfolio, consisting of 30 stocks, consistently outperformed the S&P 500 annually. The question arises – can Amazon repeat its underperformance trend in the face of uncertain economic conditions, or is a bullish leap on the horizon?
Forecasting Amazon’s Future Value
Based on projections, Amazon’s valuation stands at $205 per share, representing a 14% upsurge from the current trading price of approximately $180.
Anticipated Revenue Growth in Q1
In FY2023, Amazon recorded a 12% year-on-year revenue increase, reaching $574.8 billion with all major segments showing growth. Expectations are high for continued growth in Q1, with forecasts pointing to net revenues of around $143.6 billion, slightly exceeding the $142.5 billion consensus estimate.
- All key revenue categories, including online stores, physical stores, third-party seller services, subscription services, advertising services, and AWS displayed positive growth in FY2023. The outlook for the full-year 2024 puts Amazon’s revenues at approximately $641.4 billion.
Predicted Earnings Per Share (EPS) Outperformance
Amazon’s adjusted EPS for Q1 2024 is projected to be $0.85, 2% higher than the consensus estimate of $0.83. The company witnessed a substantial surge in adjusted net income from -$2.7 billion to $30.4 billion in FY 2023, propelled by decreased operating expenses, heightened revenues, and a considerable increase in non-operating income. This positive trajectory is expected to persist in Q1, culminating in an annual GAAP EPS of $4.12 and a revenue per share (RPS) of $61.48 for the full-year 2024.
Value Portfolio Performances
As of April 2024, Amazon has delivered an impressive 18% year-to-date return, adding to a cumulative total return of 379% since 2017. This far surpasses the S&P 500’s returns, underscoring Amazon’s potential for continued growth and value creation, despite past challenges.
[1] Returns as of April 29, 2024
[2] Cumulative total returns since the end of 2016
