Amazon Delivers A Blowout Quarter With Strong Sales; Shares Gain

Amazon.com, Inc. (AMZN) reported better-than-expected 1Q results driven by higher revenues, which was fueled by outstanding performance in all segments. Shares of the e-commerce company rose 2.4% in Thursday’s extended trading session.

Amazon reported 1Q earnings of $15.79 per share that widely surpassed analysts’ expectations of $9.54 and more than tripled on a year-over-year basis. Adjusted net sales of $108.5 billion beat the Street’s estimates of $104.46 billion and grew 41% from the year-ago period.

The North America segment net sales surged 39% year-over-year and came in at $64.4 billion in the quarter, while International sales increased 50% to $30.6 billion. Additionally, net sales for the AWS unit were $13.5 billion, up 32%. (See Amazon stock analysis on TipRanks)

For 2Q, the company projects net sales to land between $110 billion and $116 billion, versus the consensus estimate of $108.68 billion. This would represent year-over-year growth of between 24% and 30%.

Following the 1Q results, Robert W. Baird analyst Colin Sebastian reiterated a Buy rating and a price target of $4,000 (15.2% upside potential).

Sebastian believes, “Q1 results support our near-term and longer-term positive view as Amazon’s quasi-subscription platform is benefiting from multiple and compounding tailwinds – Prime memberships, Seller services (including logistics/last-mile delivery) AWS, and advertising. AWS momentum also strong as a broader range of enterprises are adopting cloud infrastructure.”

“We also note that restrictions last year on warehouse capacity and non-essential products mean Amazon is less susceptible to tough e-commerce growth comps,” the analyst added.

Consensus among analysts is a Strong Buy based on 33 unanimous Buys. The average analyst price target stands at $4,131.19 and implies upside potential of 19% to current levels. Shares have gained 40.3% over the past year.

Additionally, Amazon scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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