Amazon’s Next Earnings Report
Like all US based companies, Amazon is due to announce its quarterly earnings within the next month. As it stands, Amazon is planning to release its last quarters figures of 2020 on the 2nd of February, which is next Tuesday. As we approach closer to the Quarterly Earnings Release and within the days after, the stock price is likely to be more volatile and even possibly multidirectional on the smaller time frames.
Taking this into consideration, the movement of the stock may be more attractive to investors who are trying to earn larger amounts in a shorter period of time. However, traders should note difficulties can arise when the stock’s price is trading at higher levels of volatility and for these reasons, I look to provide as much relevant and informative data based on both fundamental elements, as well as price movement throughout the blog.
When we look at the price of Amazon we can clearly see what has attracted the market as the stock has soared over 800% over the last decade, and over 100% in under 12 months. The stock has become one of the most expensive stocks being traded by retail traders on the US Stock Exchange, but this does not necessarily mean that the traders are entering at the right price and at the right time.
The market is classing the figures as, extremely healthy, considering the major stock market crash witnessed earlier in the year. The issuer acquired the $300 million Wondery podcast platform to expand its non-musical content on the Amazon Music app. According to reports from PYMNTS.com and The Financial Times, the company’s quarterly revenues may exceed $100 billion for the first time in history; while advertising will account for about $21 billion, which is a 47% increase over last year’s result.
Amazon concentrates and generates the majority of its revenue through its e-commerce business. The company commands approximately just under 40% of the e-commerce market in the United States, while Walmart is the next-closest competitor with a mere 5% market share. Just by looking at the difference between the figures, we can see the market power of Amazon. While this business comes with much lower margins than Google’s ad business, Amazon’s highly profitable cloud computing business helps pick up the slack, giving the company a tremendous advantage over other online retailers.
Additionally, Amazon is aggressively moving into digital advertising, and the company appears to be taking market share away from Google. Investors should note that Amazon has many of the same advantages as leaders like Google and Facebook, including troves of consumer data, tools to help marketers buy ads, publishers monetize ad space, and various content platforms like Fire TV and Amazon.com where it can sell its own ad inventory. As a result, Amazon’s share of digital ad spend in the U.S. jumped 2% in 2020, while Google’s fell 2%.
Without the release of the QE Report itself it is impossible to be certain regarding the figures which are about to be released. However, on average, analysts expect earnings per share to come in at $7.17, a modest 11% above last year’s levels. However, bottom-line estimates range widely to as high as $11.16 and as low as $4.51. Revenues are projected to grow at a much more impressive pace of 37%. Should analysts be right about top-line performance, sales would land near the top end of Amazon’s guidance.
As we can see from the above figures and information, Amazon is not leading the market in every sector of the industry, but is without doubt competing in all areas and in some sectors, is leaving the competition far behind. Though, it should be noted that at the end of the day the main and sole importance is the price movement of the stock itself.