Amazon.com, Inc. (AMZN) Stock: Q1 Earnings Can’t Stop This Train

Amazon.com, Inc. (AMZN) Stock: Q1 Earnings Can’t Stop This Train

Amazon.com, Inc. (ticker: AMZN) reported first-quarter earnings after the bell on Thursday, and the results were far better than expected on all major metrics. AMZN stock jumped 4 percent in after-hours trading following the release.

 

Shares of the Seattle-based e-commerce giant had been on a remarkable, multiyear run heading into Thursday’s report. The one-, five- and 10-year trailing gains on Amazon stock read like an investor’s fantasy, with shares rallying 48 percent, 305 percent and 1,367 percent over the respective periods.

 

It was more of the same great news for Amazon shareholders in the aftermath of the Q1 report, as the remarkable bull run continues on the heels of another standout quarter.

 

AMZN Q1 earnings by the numbers. First-quarter revenue rose 23 percent to $35.71 billion, beating the $35.31 billion analysts expected by a cool $400 million.

Earnings per share, meanwhile, rose by 38 percent, clocking in at $1.48, crushing the $1.13 EPS figure analysts expected.

 

In its statement, Amazon emphasized its increasing focus on India, where it’s firing on all cylinders in an effort to get in on a huge market with massive untapped potential. Since launching nine months ago, the selection of products available via Prime has grown by 75 percent in the country, and the company has already announced 18 Indian original TV series.

 

Amazon Web Services, the cloud computing service that has been an integral part in helping Amazon achieve sustained profitability and growth, continues to grow, if at a decelerating rate. AWS revenue grew 43 percent year over year to $3.66 billion in Q1. A year ago, it was growing at a 64 percent clip.

 

Still, that 43 percent growth is nothing to scoff at, especially considering AMZN decided to actually cut AWS prices in November.

 

Even after the price cut, the most important thing about AWS is the enviable operating margins, which allow the company to take risks and try out things its competitors can’t in other parts of its business.

 

“Combine international expansion with increasing Prime subscribers and AWS profit margins – you can see why most analysts are bullish,” says Chaitanya Chandrasekar, the CEO and co-Founder of QuanticMind. “Amazon is on a freight train to hit $1,000 a share.”

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