Amazon (NASDAQ:AMZN) shares got a boost in after-hours trading on Thursday, rising 5% as of this writing, thanks to strong financial results for the September quarter.
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Specifically, the tech giant reported that its Q3 sales hit a whopping $143.1 billion, marking a 13% increase compared to the same period last year. This growth rate outpaced the 11% growth observed in the June quarter and exceeded the upper end of the company’s projected range. Furthermore, Amazon Web Services (AWS) generated $23.1 billion in revenue, marking a 12.3% year-over-year increase.
In terms of profitability, Amazon reported adjusted earnings of 94 cents per share, significantly surpassing the consensus estimate of 58 cents per share.
Among the first to react to Amazon’s earnings is Evercore’s 5-star analyst, Mark Mahaney, who writes: “This was a Clean Beat & Bracket Quarter. Revenue trends were in-line to modestly better than expected. North America & International Retail were both modestly better than expected, while AWS was right in line. 12% Y/Y AWS growth was the same as Q2 – so only stabilization, no acceleration. But marginally better than the Yipit Bar of 11%. The big surprises were the material acceleration in Advertising revenue growth (to 26%) – consistent with META and GOOGL – and especially the Big Ramps in profitability.”
“Given the Q3 results and the Q4 guidance, we would expect overall Street Amazon revenue estimates to remain largely unchanged, but Operating Income, EPS & FCF estimates to move materially higher,” the top analyst added.
Goldman Sachs’ 5-star analyst, Eric Sheridan, seems to share the sentiment of optimism surrounding Amazon’s strong performance. He writes, “While the market remains volatile with a risk-off stance, this report should bolster investor confidence in the focus of AMZN’s management team on executing against multiple secular growth themes and improved profit narratives with the 2023 holidays and FY2024 ahead as a runway for potential improved financial metrics vs Street estimates.”
Overall, there aren’t many on the Street betting against Amazon right now. 42 Buy ratings and just a single Hold result in a Strong Buy consensus rating. The average price target of $174.67 implies upside potential of 46% from current levels. (See AMZN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
