Amazon (NASDAQ:AMZN) came out with very impressive Q2 earnings this year and as a result many analysts have increased their fair value price for this tech giant. The strong dollar was earmarked by analysts as a headwind but the projected slower growth didn’t materialize. The company reported diluted earnings per share of $0.19 on net sales of $23.18 billion which was well ahead of Amazon’s guidance figures. Investors should note here that this company only had revenues of $19 billion in 2008 (full year). With present growth rates (see chart below), there is no reason this company won’t surpass $100 billion in sales in the not too distant future.
Source : Company Website
Personally I feel that the damage done to the Nasdaq Index (INDEX:COMPX) at the end of last month will take many months to recover. Nevertheless the Nasdaq has rallied off its August lows and could easily pierce through the 5,000 mark once more. Nevertheless I believe caution is warranted at present because of how the index dropped below its 200 day moving average. I have been lightening up on my tech positions of late, but not Amazon. I just feel that this stock has sound fundamentals that will hold up well in the event of a sharp downturn. Let’s discuss.
Amazon Prime Day: A Great Value Driver
Firstly this company seems to be well diversified through country and obviously product mix even though its largest market (North America) reported revenues of $13.8 billion last quarter which was 60% of the take. However its Prime premium membership ($99 per year) is growing faster internationally and was definitely aided by “Prime Day” on July 15th this year which even broke 2014 Black Friday sales. Investors shouldn’t overlook the fact that “Prime Day” sales will go into Amazon’s third quarter figures. Here are the positives shareholders can take from this experiment.
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