Amazon To Beat Consensus Estimates For FY 2019?

by Trefis Team
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Amazon (NASDAQ:AMZN) is slated to release its Q4 and full-year 2019 results on January 30, 2020. We believe that Amazon’s Revenues and earnings will beat consensus. We expect Amazon to report revenues of $279.3 billion (vs. consensus estimate of $279.1 billion), which would be 19.9% higher than the previous year. Earnings are likely to be around $22.67 (vs. consensus estimate of $20.66), higher than $20.15 reported in 2018, due to a better Total Revenue offset by a lower net income margin. We believe that stronger-than-expected earnings and revenues for FY 2019 will likely result in a positive movement in Amazon’s stock price once earnings are announced. In fact, our forecast indicates that Amazon’s Valuation is $2176 per share, which is higher than its current market price of roughly $1833.

A] Revenue Expected To Beat Consensus

  • Total revenues have increased from $136 billion in 2016 to $232.9 billion in 2018.
  • Trefis estimates Amazon’s revenues to improve further by 19.9% to $279.3 billion in 2019 from $232.9 billion in 2018.
  • Revenue improvement is expected to be driven primarily from the North America segment.

A separate interactive dashboard for Amazon provides an in-depth view of Amazon’s revenue trend and segment-wise revenue performance, along with forecast for 2019 and 2020.

B] EPS To Be Higher Than Expected

  • Amazon’s 2019 earnings per share (EPS) is expected to be $22.67 per Trefis analysis, higher than the consensus estimate of $20.66 per share.
  • An increase in Total Revenue along with lower share count slightly offset by higher increase in expenses will drive the EPS improvement compared to 2018.
  • As we forecast Amazon’s Revenues to improve and Expenses to increase further in 2019 (19.9% vs 20.3%), this will result in a fall in Amazon’s Net Income Margin figure from 4.3% in 2018 to 4% in 2019.

C] Stock Price Estimate Higher than Market Price

  • A trailing P/E multiple of 96x looks appropriate for Amazon’s stock, which is higher than the current implied P/E multiple of 90.3.
  • As per Trefis, Amazon’s 2019 revenue and Earnings will be higher than the market expectations. This forecast works out to a fair value of $2176 for Amazon’s stock, which is higher to its current market price of around $1833.

Additionally, you can input your estimates for Amazon’s key metrics in our interactive dashboard for Amazon’s pre-earnings, and see how that will affect the company’s stock price.

 

 

See all Trefis Price Estimates and Download Trefis Data here

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