Yesterday I spoke about the leadership changes at Amazon, today I will cover their spectacular results. Revenues increased a whopping 44% to $126 billion - the consensus expected $120 billion. That revenue translated into operating income of $6.8 billion for the quarter. Not too long ago, Amazon used to lose money during a quarter. More than half of those profits ($3.5 billion) came from Amazon Web Services.
Earnings per share came in at $14. Annualise that and Amazon trades on a price to earnings ratio of 59. Forward guidance suggests they trade at 35 times 2023 earnings. Many people say that a share like Amazon is "expensive" because it trades at all time highs. In reality this is the cheapest it has ever been when divided by its earnings.
Ok, so that was some boring fundamental analysis - it is very necessary, but we usually keep it to ourselves. From gaming to content creation, hardware to cloud, online retail to physical stores, Amazon has it covered and is thriving. With Jeff Bezos now head of innovation we expect more exciting sideshows to become world beaters. This is a must own in every portfolio.
http://www.vestact.com/images/warehouse_feb_21.png