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Amazon's (NASDAQ:AMZN) Net sales for Q2 2021 increased 27% to $113.1 billion, compared with $88.9 billion in the same period of the previous year. Excluding the $2.5 billion favorable impact from y-o-y changes in foreign exchange rates throughout the quarter, net sales increased 24% compared with second quarter 2020. Operating income increased to $7.7 billion, compared with operating income of $5.8 billion in the same period of the previous year. Net income increased to $7.8 billion, or $15.12 per diluted share, compared with net income of $5.2 billion, or $10.30 per diluted share, in the same period of the previous year.
Amazon retail business has picked up as consumers prefer online contactless purchases to going to the store due to the Covid-19 pandemic. The company also has increased costs due to the pandemic as they make changes in processes and invest in equipment to make sure the employees stay healthy.
With the Q4 and FY 2020 results Amazon announced that "Jeff Bezos will transition to the role of Executive Chair in the third quarter of 2021 and Andy Jassy will become Chief Executive Officer at that time. Andy Jassy is with Amazon since 1997 and is currently working as the CEO of Amazon Web services.
Below are key drivers of Amazon's value that present opportunities for upside or downside to the current Trefis price estimate for Amazon:
For additional details, select a driver above or select a division from the interactive Trefis split for Amazon at the top of the page.
Amazon is an online retailer which sells electronics, books, retail consumer goods, music, games, apparel and other merchandise to consumers in the U.S., Canada, the United Kingdom, Germany, Brazil, France, China, Japan, India Mexico, Netherlands, Italy and other countries. The company also provides web services such as cloud computing and online storage to web sites and web developers.
Amazon Web Services business is the most valuable segment for Amazon due to the company's high growth within this segment. In recent years, consolidated AWS revenues have grown at high double digits. Despite the lowest revenue contribution, AWS is the most valuable segment due to high margins of cloud computing as compared to e-commerce retail business which operates on razor thin margins.
The growth in Amazon's Web Services has become a critical factor driving the company's expansion globally. Several companies continued to adopt these services in recent years. Besides helping big businesses, the company’s cost efficient web services are also useful for young start-ups that may have cash restrictions.
The growth in the AWS segment has been massive - the annual growth in AWS revenues came in at 70% in 2015, 55% in 2016, 43% in 2017, 46% in 2018 and 37% in 2019. Apart from this, the company also showed strong profitability in the cloud-services business as margins have improved in this segment in successive years.
Amazon is making significant investments to expand its presence in regions such as China, India, Italy and Spain. While these investments will enhance revenue growth, however, this strategy could also raise margin pressure. Amazon will invest a couple of billion dollars on its Indian operations, but since the country’s e-commerce market is highly competitive, we believe it will be difficult for Amazon to attain profitability in the region for at least a couple of years.
[Updated 08/12/2021] Amazon Update Amazon's stock (NASDAQ:AMZN) has gained 3% YTD, and at its current price of $3306 per share, it has a fair value of $4257 – Trefis’ estimate for Amazon's valuation. ...More
What? Amazon (NASDAQ:AMZN) posted a mixed set of Q2 2021 results, with revenue of $113.1 billion missing expectations, although EPS of $15.12 was stronger than expected. Revenue growth slowed to 27% year-over-year, down from about 44% in Q1. The company expects growth to cool further in Q3 to about 13.5%, based on the mid-point of guidance. ...More
Amazon (NASDAQ: AMZN) is scheduled to report its fiscal Q2 2021 results on Thursday, July 29. We expect AMZN to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenue and earnings figures in each of the last four quarters. ...More
What? The Pentagon canceled a planned $10 billion cloud-computing contract called JEDI that was awarded to Microsoft in 2019. This will be replaced with a project that will most likely be split between Microsoft(NASDAQ:MSFT) and Amazon(NASDAQ:AMZN). ...More
[Updated 05/28/2021] Amazon Update Having grown by 75% since the end of 2019, Amazon's stock (NASDAQ:AMZN) still has growth potential in the near term. ...More
What? Amazon(AMZN) is apparently in talks to acquire movie studio MGM Holdings, marking the e-commerce behemoth's most ambitious bet in the entertainment space. ...More
Amazon (NASDAQ: AMZN) is scheduled to report its fiscal Q1 2021 results on Thursday, April 29. We expect AMZN to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenue and earnings figures in each of the last three quarters. ...More
The S&P 500 is up a solid 45% over the last year and many large-cap stocks are now trading near all-time highs. In our indicative theme of Stocks Poised For A Split, we’ve identified a group of over ten companies from the S&P 500 that are growing revenue quickly and consistently, with their stocks trading at high prices, potentially maki... ...More
The S&P 500 is up a solid 75% from the lows of March 2020 and many large-cap stocks are now trading near all-time highs. In our indicative theme of Stocks Poised For A Split, we’ve identified a group of over ten companies from the S&P 500 whose stocks trade at high prices, potentially making them candidates for a stock split. ...More
Amazon’s stock (NASDAQ: AMZN) has fallen by 2.2% over the last five trading days. The company announced its results on February 2nd, 2021. For FY 2020 Amazon recorded revenues at $386 billion, up 37% and earnings per share at $42.61, up from $23.46 in the previous year due to better operational efficiency. ...More
[Updated 01/11/2021] Amazon Update Having grown by 72% since the end of 2019, Amazon's stock (NASDAQ:AMZN) still has growth potential in the near term. ...More
Amazon's (NASDAQ:AMZN) stock climbed more than 11% in the last 5 trading days, adding nearly $170 billion to its market cap. To put things in perspective, the increase in Amazon's market cap in a single week was more than the magnitude of market cap of most of the firms in the S&P 500 index. Needless to say, there is always a doubt whether Amazon can sustain its incredible run. ...More
Stock splits are back in favor this year, with Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) splitting their shares late last month. Although splits don’t change the fundamentals of a company, they often cause a run-up in the stock price post-announcement as investors see them as a signal that growth could remain strong ... ...More
Best Buy's stock (NYSE: BBY) has grown by a strong 113% (as of September 10) since the coronavirus low on March 23, pushing its market value close to $28 billion. ...More
Large-cap stock splits are back with Apple and Tesla slated to split their shares on August 31. Although splits don't change the fundamentals of a company, they often cause a run-up in the stock price post announcement. ...More
After a near-70% rise since the market bottom on March 23 this year, we believe Amazon's stock (NASDAQ:AMZN) doesn't have any room to grow at its all-time high current price of around $3,200 per share. ...More
Microsoft's stock (NASDAQ:MSFT) has doubled since the beginning of 2018. Great news for Microsoft investors. Things haven't been too shabby for Amazon (NASDAQ:AMZN) investors either, as the company's stock also gained almost 60% during the same period... ...More
The Coronavirus pandemic is making people rely increasingly on the Internet to work, learn, shop, and entertain themselves as they spend more time at home. ...More
After an almost 25% rise in Amazon's (NASDAQ:AMZN) stock since the beginning of 2020, at the current price of around $2,400 per share, we believe Amazon’s stock offers limited upside potential once the market shakes off the impact of the coronavirus outbreak. Despite disruptions in its supply chains globally, Amazon has benefited over recent weeks as millions of people in the U.S. ...More
Amazon (NASDAQ:AMZN) stock took a big hit, falling by about 11.8% since March 8, (through March 12), as the broader S&P 500 fell by over 16.5%. The stock is down by a total of over 16.5% since early February. There were two broad trends driving the sell-off. ...More