Amazon Stock Has Never Looked Cheaper. Is Now the Time to Buy?
Amazon (NASDAQ: AMZN) destroyed estimates once again in its latest earnings report.
The e-commerce giant has been one of the biggest winners during the coronavirus pandemic and its third-quarter results showed why. Revenue jumped 37% to $96.1 billion, sprinting past the analyst consensus at $92.7 billion and the company's own guidance of $87 billion to $93 billion. Its bottom-line growth was even more dramatic as operating income jumped 96% to $6.2 billion, well ahead of Amazon's forecast of $2 billion to $5 billion, while earnings per share nearly tripled from $4.23 to $12.37, crushing the average Street estimate of $7.41. Earnings per share benefited from $925 in other income in the quarter, mostly related to equity holdings in other companies and adjustments related to foreign currency. In the quarter a year ago, it had other expenses of $353 million.
In spite of the blowout earnings results, the stock did something surprising. It fell sharply, closing down 5% the day following the report. There was no clear reason for the sell-off, though it came along a broad slide in big tech stocks as the Nasdaq Composite lost close to 2.5% on the day. Investors seemed to believe that the sector had become overinflated even as earnings reports were mostly better than expected.
Source Fool.com