Amazon’s (NASDAQ: AMZN) stock has been struggling to trade in green so far in 2021 only due to easing social distancing policies, which many investors believe would hurt Amazon’s revenue growth trends.
Investor’s optimism towards value stocks that are likely to benefit from a recovering economy and rising yields are among the key factors behind Amazon’s stock price underperformance since the beginning of this year.
Shares of Amazon are currently trading around $3,100 level, down significantly from the 52-week high of the $3,500 mark that it had hit during the third quarter of 2020. Nevertheless, several big players and money managers see the dip in Amazon’s stock price as buying opportunity.
Strong financial forecasts would support Amazon’s stock
Amazon, which has crossed the $100 billion revenue mark for the first time in the fourth quarter of 2020, is projected to post $104 billion in revenue for the March quarter compared to revenue of $75 billion in the year-ago period.
Moreover, Amazon’s revenue is expected to hit $474 billion in 2021 and $556 billion in 2022. This represents significant growth compared to record revenue of $375 billion in 2020.
Amazon’s stock price could also experience strong backing from the bottom-line numbers. The consensus earnings per share estimate is standing around $9.44 compared to earnings of $6.25 per share in the year-ago quarter.
Higher stock price targets and bullish analyst’s commentary hints upside for Amazon stock
Bank of America analyst Justin Post provided a $4,000 price target to Amazon stock, citing strong growth prospects with eCommerce penetration still low, a large uptick in fulfillment capacity, and an ongoing shift to the Cloud.
“Amazon remains one of our top Online penetration stocks as eCommerce is still only 20% penetrated following a big bump in 2020, and the shift to the Cloud is still in early stages,” Post wrote in a note to investors.
Billionaire David Tepper has recently stated that Amazon’s stock looks attractive, trading around the lowest level since September. He believes Amazon has permanently changed consumer shopping trends.
