Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Amazon Q2 Earnings Preview: Sales Growth, Cloud Computing Will Be In Focus

By Investing.com (Haris Anwar/Investing.com)Stock MarketsJul 29, 2021 14:30
uk.investing.com/analysis/amazon-q2-earnings-preview-sales-growth-cloud-computing-will-be-in-focus-200489339
Amazon Q2 Earnings Preview: Sales Growth, Cloud Computing Will Be In Focus
By Investing.com (Haris Anwar/Investing.com)   |  Jul 29, 2021 14:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Reports Q2 2021 results on Thursday, July 29, after the close
  • Revenue expectation: $115.33 billion
  • EPS expectation: $12.24

When Amazon.com (NASDAQ:AMZN) reports its second quarter earnings later today, investors will focus on sales, which could show some slowdown after hitting a blistering pace during the pandemic.

Since the outbreak of COVID-19 in March of last year, Amazon’s sales have continued to surpass expectations as people staying at home made more and more purchases online. But, as the U.S. economy reopens and people begin returning to their normal routines, chances are that some portion of sales will go back to brick-and-mortar stores.

By the end of the first quarter, there was no evidence that this trend was ebbing, however. The Seattle-based company reported in April that its Q1 revenue jumped 44% and earnings were a record $15.79 a share, exceeding analysts’ estimates. For the quarter ending in June, Amazon projected sales between $110 billion and $116 billion.

The Q2 results have likely benefited from the company’s two-day Prime Day event in June, the company’s shopping bonanza for members of its $119-a-year speedy shipping program. According to JPMorgan) estimates, the event could bring in $8.4 billion in total Prime Day revenue this year, up 12% from its estimate from last year’s haul.

In addition to Amazon’s e-commerce business, the company’s cloud computing and ad businesses continue to show strong momentum. These units generate fatter margins than the retail operation. Sales at Amazon Web Services climbed 32% in Q1, while ads posted a 77% jump in revenue.

Amazon Stock Still A Buy

After surging more than 70% last year, shares of Amazon are up more than 12% this year, tracking the performance of the tech-heavy NASDAQ 100 Index. The stock closed on Wednesday at $3,630.32.

AMZN Weekly 2018-2021
AMZN Weekly 2018-2021

After this strong pandemic-era performance, analysts remain bullish on this e-commerce powerhouse’s growth prospects as they believe the company’s sales momentum will continue through the reopening.

Several Wall Street analysts have recently raised their price targets on Amazon, citing a favorable environment for its business units. Telsey analysts reiterated their outperform rating on the e-commerce giant ahead of its earnings report, saying Amazon has “superior execution.”

According to its note:

“We maintain our above consensus 2Q21 sales and profit estimates, reflecting the ongoing favorable shift toward online, strong business trends, including Prime Day, market share gains across categories and superior execution.”

Of 49 analysts polled by Investing.com, the average 12-month price target is $4,238.78.

AMZN Analyst Consensus
AMZN Analyst Consensus

That represents a 16% upside potential above the current share price.

Bottom Line

Amazon continues to remain a solid holding for long-term investors due to its leading position in the e-commerce arena. The factors that fuelled the 2020 rally are still in play, given still-low e-commerce penetration, expanded fulfillment capacity, and the shift toward cloud computing.

Amazon Q2 Earnings Preview: Sales Growth, Cloud Computing Will Be In Focus
 

Related Articles

Amazon Q2 Earnings Preview: Sales Growth, Cloud Computing Will Be In Focus

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email