Analysts’ estimates suggest that Amazon price forecast is poised for continued growth in the coming years. The earnings and revenue estimates are strong, and while the earnings history has been mixed, the earnings trend is relatively uptrend.
Amazon appears to be on track for growth in the upcoming years. Let’s take a closer look at the earnings and revenue estimates, as well as the earnings history and trend.
Earnings Estimate:
The average earnings estimate for Amazon’s current quarter (Mar 2023) is $0.22 per share, with a low estimate of -$0.03 and a high estimate of $0.65. This represents a significant increase from the year-ago EPS of -$0.38. The estimates for the next quarter (Jun 2023) are even higher, with an average of $0.33 per share. However, investors should keep a close eye on future earnings reports to ensure that Amazon continues to meet or exceed expectations.
Looking further ahead, the current year (2023) is estimated to bring earnings of $1.41 per share on average, with a range from $0.18 to $1.94. The estimates for the following year (2024) are even higher, with an average of $2.51 per share.
Overall, these earnings estimates suggest strong growth for Amazon in the coming years.
Revenue Estimate:
In terms of revenue, Amazon is also expected to continue growing. The average revenue estimate for the current quarter is $124.55 billion, up from $116.44 billion in the year-ago quarter. Estimates for the next quarter are even higher, at an average of $130.28 billion.
For the full year 2023, the average revenue estimate is $557.38 billion, up from $513.98 billion in the previous year. Looking ahead to 2024, estimates suggest further growth, with an average revenue estimate of $626.32 billion.
Earnings History and Trend:
The earnings history for Amazon shows a mixed picture. While the company has missed estimates in two out of the past four quarters, it has also beaten estimates in two. However, it is worth noting that the company significantly missed estimates in the most recent quarter (Dec 2022), with an actual EPS of $0.03 compared to an estimate of $0.17.
Regarding the earnings trend, the current and next quarter estimates have remained relatively stable over the past 90 days, indicating that analysts are confident in their estimates. However, estimates for the current year and next year have decreased slightly over the past 30 and 60 days, respectively.
At the moment, Amazon stock is undervalued.
Compared to the rise of 6% seen in the S&P500 index so far this year, shares of Amazon (NASDAQ -1.6%: AMZN) have increased by around 17%. However, the stock is trading at a 27% discount to its fair value of $134, according to Trefis’ appraisal of Amazon’s worth. The net sales for the fourth quarter came in at $149.2 billion, which is nine percent more than they were the previous year.
This result was better than expected. It was led by a 13% growth in North America and a 20% increase in sales of Amazon AMZN +0.2% online services, which were partially offset by an 8% fall in revenues generated by the company’s international division.
On the front of costs, unfavorable increases in operational expenditures were seen throughout the quarter, which ultimately led to a 21% decrease in operating profits. The company also saw a reduction in its non-operating income (cost), from $11.5 billion to -3.7 billion. The actual net income was $278 million, which is a decrease of 98% year on year.
The company’s sales for FY2022, which came in at $514 billion, was a year-on-year increase of 9%. It was led by a 13% growth in North America and a 29% increase in AWS divisions, which were slightly offset by an 8% reduction in revenues in the international segment of the business.
The corporation nonetheless managed to end the year with a net loss of $2.7 billion even though its revenues were up. The problem was caused by increased operating expenses and a significant rise in non-operating income (expenses), which pushed the company’s net loss from $13.3 billion to -18.2 billion.
Notably, non-operating income (expense) fell due to a pre-tax valuation loss totaling $12.7 billion on the joint stock investment in Rivian Automotive.
AMAZON anticipates that its sales will range between $121 billion and $126 billion in the first quarter of 2023. In the upcoming fiscal year 2023, we anticipate that Amazon’s revenue will reach $560 billion. In addition, this year, the adjusted net income margin is anticipated to expand, resulting in a net income of approximately $17.3 billion and revenue per share of $55.44, respectively.
Shall you buy Amazon Stock?
Amazon’s recent entry into a specific sector of the healthcare industry, though, is encouraging. Financial traders will likely succeed with investing in AMZN shares despite a lot of worries and hurdles.
In January, Amazon’s investors began to see signs of a possible turnaround. It is unclear whether this upswing would continue throughout the year. Amazon has come a long way from its early days as an online bookstore, but now is still the time for investors to maintain the course.
By the end of 2022, Amazon, like many other e-commerce firms, was still reeling from the effects of the epidemic. Early on in COVID-19, consumers who were unable to shop in person due to store closures in 2020 and 2021 rushed to online merchants. But, this massive pull-forward of business was eventually overwhelmed by a reversion, which impacted down growth in the next year.
The pendulum is swinging toward its original position. We are finally turning a corner in terms of growth as the analyst predicts that brick-and-mortar and online retail trajectories will soon become more similar. This may signal a return to pre-COVID levels of business, both online and off.
Maybe the first signs of its revival were seen over the Black Friday weekend. Amazon said that the five days between Cyber Monday and Thanksgiving, which they call the “Turkey 5”, were their biggest-ever holiday shopping period. “This Christmas shopping weekend was Amazon’s busiest ever,” the company stated in a statement, without revealing specifics.
This bodes well for Amazon since it suggests that the downturn in e-commerce growth may be over.
Amazon expands its presence in the medical field
We may anticipate additional Amazon entrance into the healthcare industry in 2023, as it has done over the last several years.
In 2018, Amazon made headlines by purchasing PillPack for a reported $1 billion. The online pharmacy service does more than just fill prescriptions; they also place the medications into individual packets that are time and date stamped and clearly labeled with the appropriate dose information. The first medical service offered by Amazon was renamed Amazon Pharmacy.
When Amazon announced last year that it would buy One Medical for $3.9 billion, it caused quite a stir. Around 800,000 individuals in 16 cities have access to the primary care startup’s hybrid of online and in-person services. Through the app, patients may communicate with their doctors via instant messaging, schedule appointments, renew prescriptions, and engage in video visits.
The dissolution of Haven, a partnership it formed with Berkshire Hathaway and JPMorgan Bank, is one example of a failure to successfully implement a strategy. Amazon has also just ended its primary care program, Amazon Care, which provided both telemedicine and in-office treatment.
It’s no secret that Amazon wants a piece of the healthcare pie, and if the company’s previous actions are any indicator, we can expect to see it make additional inroads in the industry in 2023, though we don’t yet know the specifics of how that will happen.
Amazon still dominates the cloud computing market
Amazon Web Services (AWS) was the first of its kind when it was released about 17 years ago, and it continues to be the market leader by a wide margin. Following Amazon Web Services (AWS) with a market share of around 32% for cloud infrastructure services is Microsoft Azure, which has a market share of approximately 22%, and Alphabet’s Google Cloud, which has a market share of approximately 9%.
Furthermore, as a result of digital transformation, more businesses are shifting their operations to the cloud, including data storage, management, and application deployment. The market for IaaS is expanding rapidly; it was worth $66B in 2021 and is projected to be worth over $279 billion by 2027, with an annual growth rate of over 45%.
These long-term trends will propel Amazon’s cloud business, allowing the corporation to maintain its dominant market share in the cloud computing sector until 2023.
Amazon stock, which I stated at the outset, is down around 54% from its all-time peak in late 2021. The corporation has maintained steady growth, even though at a slower rate. The firm is also undervalued when compared to its past performance. It has been around eight years since Amazon’s price-to-sales ratio was this low (about 1.5 times sales).
There is a good chance that Amazon’s stock price will rise again in 2023 because of the company’s low current price and its dominant market position in both cloud computing and online shopping.
In the previous year, AMZN stock traded as high as $170.83; the recent decline is not necessarily attributable to any wrongdoing on the part of the corporation. A widespread selloff of technology companies due to worries about future interest rate rises is likely to blame for most of the technical damage.
The Fed can’t keep raising interest rates forever, and inflation has been stable since the summer of last year. Also, Amazon stock seems to be reasonably valued, since it is now trading for less than half of its all-time high of $170.
And here’s a number that you’re probably not aware of: The price-to-sales (P/S) ratio for Amazon is 2.71. A P/S ratio of less than 5x is great, and anything below 3x is ideal.
Generic Medications Are Available to Prime Members
In today’s society, it seems like everyone has a subscription to Amazon Prime. Prime members may have reason to celebrate in the year 2023. Certain generic versions of prescription drugs may be more affordable for them.
This is because Amazon is launching a new subscription service called RxPass, which will only cost $5 per month for Prime members. With RxPass, customers will have “unlimited access” to over 80 “frequently prescribed generic drugs,” according to the Wall Street Journal.
RxPass is a cheap option since the $5 monthly price covers everything from storage to delivery. In addition, having drugs delivered to your house might be much more practical than making many trips to the pharmacy.
Hence, it shouldn’t come as a surprise if, in the following months, a lot more people start using RxPass instead of going to regular pharmacies. This could be a game-changer for both Amazon and its consumers.
Amazon’s introduction of RxPass was an inspired move. It’s an excellent strategy for fostering loyalty among existing customers and attracting new ones.
In the meantime, AMZN stock is reasonably priced. Throughout the previous year, the share price reached $170, but conservative investors should aim for $140. If Amazon’s stock reaches that price by 2023, we will have made a respectable profit.
Predictions for Amazon in the Year 2023
With the knowledge that the current climate of rising inflation and economic troubles throughout the world is just transitory. Consequently, it is safe to say that Amazon has handled the setbacks in a mature manner and should see improved growth in 2023.
The corporation is, for instance, making strides toward a more robust cost structure, which is a major benefit for the future. The premiere of NFL Thursday Night Football and other such programs are also driving more and more people to sign up for Amazon Prime.
One of Amazon.com’s greatest strengths is its varied product offerings. E-commerce is its moat, AWS is its growth engine, and ad income is just now coming into focus. To this end, faith in Amazon’s business model is crucial. Furthermore, the current decline allows investors to include it in their 2023 portfolios.