E-commerce giant Amazon (NASDAQ: AMZN) is still one of the darling stocks of investors looking for long term value generation. Closed at $2,150.80, the company is merely inches away from its 52-week high of $2,185.95.
The Amazon stock has been in a whirlwind in the past one year, hitting lows at $1,586. In 2020, the stock went down to $1,838.24 on January 27 but recovered quickly from the slump.
Experts are confident that despite some hiccups, Amazon is a strong company and still has room to grow. In the past three months alone, the stock has risen 21.7%.
With a fourth straight record close day and a 5.7% rise in price during the increase, a strong e-commerce and cloud computing business, a $1.07 trillion valuation seems good. With a strong holiday quarter report, the company is the third most valuable company in the US behind Microsoft and Apple and just a step ahead of Google.
Moving beyond its own expectations
The holiday quarter brought $3.3 billion in profits for the company, translating to $6.47 per share. Its quarterly sales hit a new record at $87.4 billion. Last year, the company’s holiday quarter sales were $72.38 billion with a profit of $6.04 per share. The company beat analyst expectations by a solid margin, who expected $86.03 billion in revenue and $4.04 profits per share.
Amazon forecasted a grim holiday season owning to its investments and a short holiday season. It expected net revenue of $80 billion to $86.5 billion. Analysts were expecting $87.39 billion in revenue.
Jeff Bezos sold Amazon stock
It would be troublesome to find the founder and CEO of a company sell $4.1 billion worth of stock in just 11 days. Filings with the Securities and Exchange Commission show that Jeff Bezos has sold the company’s stock.
This selling is a part of a pre-arranged 10b5-1 trading plan. Bezos had previously announced that he would sell stock worth $1 billion each year to fund Blue Origins, his space exploration company. Overall, Bezos’ stock sale doesn’t ring any bells for the company.
Considering Amazon’s market leader status in e-commerce, its foray into groceries, its Prime range of services and its valuable cloud business, Amazon is still a good buy. Analysts expect an EPS of $26.83 in 2020, up from $22.99 in 2019.