In the midst of the COVID-19 pandemic, Amazon.com Inc ..(AMZN) observed growth in e-commerce and cloud revenues. Online shopping has expanded as the customer order more products and services while sheltering at home, and as the domestic economy has flown in size, demand for cloud services has risen.
As of October 29, 2020, for the third quarter of FY2020, investors will watch as these optimistic developments continue.1 Good growth in earnings per share ( EPS) and sales is anticipated from analysts.
- Another big metric, Amazon Web Services ( AWS), will also be based on investors. Another advantage of the pandemic-induces development of the working home economy is AMSA’s cloud computing infrastructure, which has expanded steadily in recent years. AWS sales are forecast to increase annually by analysts.
- Over the months leading up to the market collapse, Amazon’s share has held pace with the rest of the market, as concerns about the spread of coronavirus have risen in the second half of February. However, it has since significantly surpassed the stock, which spared the worst of the crash. In the past 12 months, Amazon’s shares have produced an overall return of 81.8 percent well above the overall return of the S&P 500 of 15.3 percent
- With earnings speeds above 600% in Q2 2020, amazon’s analysts shocked 3 EPS, the highest rate since Q1 FY 2019, increased by 97.4% YOY. In their Q2 earnings update of 30 July, they announced that 175,000 new positions have been added since March because of increased demand and sales.4 Revenue rose at 40.2 percent – the highest rate since 1 Q1 2018.
The sales revenue
Sales development started in the first quarter of FY 2020. Revenues grew 26.4% YOY, over the four quarters of 2019, up from an average of nearly 20%. Total operational spending however increased much faster with 29.3% – EPS 5 decreased by 29.4%.
Analysts expect EPS, a slower rate than Q2, to raise 72.1 percent in the third quarter of FY 2020. In contrast to the quarter of the year, sales are forecast to rise by 32.3 percent. In 2020, economists predict that EPS will grow by 38.1%, with sales of 31.6%, at least the highest rate of the last seven years.
Investors will also concentrate on sales created by the cloud platform AMZN AWS. The AWS Section supplies start-ups, companies, governments, and their departments and research institutions with global computing, storing, databases and other resources. In 2019, AWS produced just 12.5% of the overall revenues of Amazon. However, AWS account for 63.3 percent of the company’s combined operating revenue, as it has far better profit margins than its e-commerce operation. You can check AMZN news before investing in this stock.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.