FinkAvenue
Summary
- Amazon stock sold off over 12% post-earnings. I believe the reaction is unwarranted due to their stronger financial health and growth prospects.
- Despite a slight margin drop, Amazon’s profitability remains high, with strong margins and impressive financial metrics. These margins will likely improve again.
- The market’s misinterpretation of Q2 earnings overlooks the strong performance of AWS and overall positive outlook for Amazon, making it a strong buy.
Investment Thesis
Since I last covered Amazon (NASDAQ:AMZN) in July (pre-earnings), the stock has sold off in part due to the market’s reaction to earnings. I believe this reaction is unwarranted. While operating margins dropped slightly, the market appears to be overlooking the substantial improvements the company has achieved, especially compared to the previous year. Amazon (because of their cyclicality due to seasonal retail trends) will often see margins move up and down on a sequential basis. What matters is YoY improvement.
READ FULL ARTICLE HERE!
