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Why Amazon won't be worth $ 1.5 trillion in about 800 days as this analyst foresee




<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Don't be so quick to sell your house and bet on everyone after the tax gains on Amazon's stock price ( AMZN ) reaches $ 3,000 for 800 days or so, as an analyst is now initially proposing to do. "data-response time =" 15 "> Don't be so quick Sell ​​your house and bet on all the postponed profits on Amazon's share price (AMZN) reaches $ 3,000 for 800 days or so, as an analyst now basically suggests to do. [1[ads1]9659002] Analyst Michael Olson, Piper Jaffray, spoke some heads for the talk day, saying that the Amazon stock could reach $ 3000 once between mid-2021 or within 24-36 months. The hypothetical move will mark a 65% price explosion in a stock that is mostly known to rise only over time. Amazon's market value with a share price of $ 3,000 will be over $ 1.5 trillion.

"We have a high degree of confidence that Amazon shares can reach this level without major acquisitions or other significant changes in business. However, a potential AWS (Amazon Web Services) voltage will undoubtedly help to mark the relatively low valuation of the other segments, "claims the eye-catching Olson.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Missing all the hype around this The stock talk is a rational discussion of Olson's prerequisites for Amazon's business, and Olson initially expects the burst growth rates Amazon has become known on Wall Street to slow across the board. should cause an investor to wonder why Amazon won does not need a longer period to reach the $ 3,000 markup (if it does at all). "data-response time =" 18 "> To miss all The hype around this store call is a rational discussion of Olson's prerequisites for Amazon's business. To a large extent, Olson expects that the brown growth rate Amazon has become known on Wall Street to slow across the board. Yes, slowly who should make an investor wonder why Amazon doesn't need any longer to reach the $ 3000 mark (if it does that at all).

<p class = "canvas -atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Color your really a stock geek without life, but usually a significantly higher stock price in a short time comes with accelerating growth prices for a company. "data-reactid =" 19 "> Color your really a stock geek without life, but usually comes a significantly higher stock price on short time with accelerate growth rates for a company.

But that's not what Olson thinks here.

"In particular, we assume a multi-year deceleration in growth for all major categories of the Amazon business, along with very minimal adjustment of complex group multiples, despite the fact that Amazon is growing significantly faster than the comps in both clouds (AWS) and advertising segments," writes Olson.

The Amazon logo appears on Nasdaq MarketSite, in New York's Times Square. (AP Photo / Richard Drew, File)

Specifications are further elaborate in Olson's financial modeling. A few quick observations:

  • Amazon's North American sales volume is expected to slow sequentially every quarter by 2020.

  • Amazon's North American retail margin is seen at a steady decline in 2020.

  • Shipping and settlement costs are expected to increase by 19.5%, respectively. and 21.2% by 2020 towards 2019.

  • Total sales growth is expected to fall below 20% – and stay there – after the second quarter of 2020.

  • Global retail margins seen only increase to 4.3% by 2020 from 2, 9% in 2019. At the same time, the AWS operating margins are set at 29% unchanged in 2020.

<p class = "canvas-textile-textile Mb (1.0em) Mb (0) – -M Mt (0.8em) – sm" type = "text" content = "I am not trying to hate on Amazon's prospects or Olson's work (I enjoy his analysis on Netflix ( NFLX )). Only the big calls that this must be carefully examined (as all Wall Street calls are called) Remember, Amazon goes into its next decade e with shipping costs likely on a permanent appearance and tougher competition from formidable rivals Walmart ( WMT ) and Target ( TGT ). "data-response time =" 40 "> I am not trying to hate on the Amazon prospects or Olson's work (I like his analysis on Netflix (NFLX)). It is only the big conversations that this must be carefully examined (as all Wall Street calls are called). Keep in mind that Amazon is coming into its next decade of shipping costs that are likely to be a permanent appearance and tougher competition from formidable rivals Walmart (WMT) and Target (TGT).

<p class = "canvas-atom canvas-text Mb)" We will not bet on Amazon, "said Crossmark Investments global chief strategist, Victoria Fernandez, at Yahoo Finance's The First Trade . & # 39; Fernandez has no positions in Amazon. Data-reactid = "41"> "We didn't want to bet on Amazon," says Cross Fernando Investments global chief strategist Victoria Fernandez at Yahoo Finance & # 39; The First Trade. Fernandez has no positions in Amazon.

Yes, it is hard to bet on Amazon to Fernandez's points, although it is not difficult to look at research that Olson is with greater skepticism than the norm.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – Sm Mt (0.8em) – Brian Sozzi is an editor-at-large and co-worker of & # 39; The First Trade & # 39; at Yahoo Finance. Follow Brian Sozzi on Twitter @BrianSozzi "data-reactid =" 43 "> Brian Sozzi is an editor of large and co-host of & # 39; The First Trade by Yahoo Finance Follow Brian Sozzi on Twitter



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