Amazon (NASDAQ:AMZN) has reported its latest earnings, delivering news and results that have pleased analysts and investors. As a result, the company’s stock has seen a 12% increase since the start of February, bringing its year-to-date gain to 16%. Over the past 12 months, Amazon’s share price has risen by an impressive 75%. Analysts are optimistic about the company’s future growth, with a median price target of $205 a share among 60 analysts who track Amazon’s progress. This implies an additional 18% upside from current levels. Furthermore, 97% of analysts rate AMZN stock as a “buy,” with no “sell” ratings following the strong Q4 2023 print.
After facing challenges in the wake of the pandemic, Amazon is now back on track. The company had overbuilt and overhired during lockdowns to meet the increased demand for online shopping and e-commerce services. However, the end of the pandemic coincided with inflation and rising interest rates, leading to a string of subpar earnings and a 55% decline in Amazon’s stock between November 2021 and December 2022. Under the leadership of CEO Andy Jassy, Amazon took necessary steps to right-size the company. This included laying off more than 25,000 employees, scrapping construction plans for new e-commerce fulfillment centers, and redirecting resources towards fast-growing areas such as Amazon Web Services (AWS), the Prime streaming platform, and artificial intelligence (AI).
Amazon’s Q4 2023 earnings report exceeded Wall Street’s expectations, resulting in a 6% increase in the company’s share price in a single day. The company reported earnings per share (EPS) of $1 compared to the expected 80 cents among analysts. Revenue for the quarter totaled $170 billion, surpassing the forecasted $166 billion. The strong performance can be attributed to robust holiday shopping, with sales up 14% from the previous year. Amazon’s Q4 profit of $1 per share marked a significant increase of 3,233% compared to the previous year. The company also reported strong revenue from AWS and advertising.
Looking ahead, Amazon continues to seek new growth opportunities. The company recently expanded its partnership with the NFL, securing exclusive rights to air a playoff game next season. Live sports is seen as a driver of Prime subscriptions. Additionally, Amazon sees potential in generative AI and aims to deploy AI to enhance the e-commerce shopping experience. With its operations right-sized and sales and profits growing at a brisk pace, Amazon is regaining its status as a leading U.S. technology concern.
For patient shareholders, now is a great time to consider buying AMZN stock. With numerous catalysts for future growth and Wall Street’s positive outlook, Amazon’s share price is expected to steadily rise.