Amazon continue to rise up and the average 12-month price target is about $750, which means the company has the potential to jump another 20%. Not a surprise for bullish investors were about 90% is bullish on that stock.
The e-commerce giant will post first quarter earnings on Thursday 28 April after market close, and it`s expected to post EPS of $0,64 on $28 billion in revenue which is three cents higher than Wall Street on the bottom line and around $60 million higher on top.
Since the start of the quarter, estimates have fallen 6% for EPS but increased 2% for revenue. Despite the decline estimates, profits are anticipated to increase and so are revenue. Amazon have been posting losses, ut is coming off three straight quarters of profitability.
Amazon Prime and the dominance of Amazon Web Services (AWS) is expected to carry the retailer this year. They have doubled it membership in Amazon Prime for the past two years, and that is up 54 million, and almost half of all adults in the U.S have Prime subscriptions.
AWS is the leading in the cloud infrastructure industry, representing about 30% of the market, and large enterprises such as Netflix have migrated to AWS to be its platform provider which validates their credibility and reliability.
A study showed that Amazon had a better catalogue of Prime Video movies on TV shows compared to Netflix. According to Barclays, Netflix`s overall catalog has experienced a slide of up to 28% over the past year.
Mark Fahey revealed that Amazon offered a better deal in terms of amount and quality of video streaming compare to Netflix. Additionally, it had more titles with high ratings from users, and quality is of more importance than quantity.
Having a platform with a great library is not enough while quality that is offering constantly refreshed content will be vital in the future. it`s a shift from licensing non-exclusive content to original series and movies that one can get anywhere else.
Netflix has a budget of $5 billion on content in 2016 and that number will rise to about $6 billion in 2017. That doesn`t mean the entertainment value will increase. While Amazon and Netflix are fighting we can see a third player in this game, and that is YouTube with its amazing content.
Amazon has expanded its web services in five new regions this year, including China, India, and the U.K. Heavy investments in global expansion on top of Google and Microsofts ascension in cloud computing will put pressure on Amazons margins.
Expected growth in cloud computing and IoT should make a great outlook for Amazon as they continue to expand their web services.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Ket Garden
Shiny bull 