alingtonsky
Forumer storico
October 22, 2010, 12:22 PM ET
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One interesting note in the reports: several analysts mention that Amazon could be getting close to launching a subscription-based streaming video service to compete with Netflix; the company issued a sort of non-denial denial on the call. Asked about the possibility, CFO Tom Szkutak said he “wouldn’t speculate what we would do or not do in the future there, but it’s certainly an area that there is room for a lot of innovation. And we’ve got a great team in place that’s working on that.”
Here’s a rundown on some of what the Street had to say about the stock this morning:
Amazon Rebounds Despite Margin Issues; To Take On Netflix? - Tech Trader Daily - Barrons.com)
...
One interesting note in the reports: several analysts mention that Amazon could be getting close to launching a subscription-based streaming video service to compete with Netflix; the company issued a sort of non-denial denial on the call. Asked about the possibility, CFO Tom Szkutak said he “wouldn’t speculate what we would do or not do in the future there, but it’s certainly an area that there is room for a lot of innovation. And we’ve got a great team in place that’s working on that.”
Here’s a rundown on some of what the Street had to say about the stock this morning:
- James Mitchell, Goldman Sachs: “Our main conclusion from these results is that Amazon can increase revenue at over 30% in 2011, sharply above consensus estimates of 26% and 2X-3X faster than the e-commerce industry.” He keeps his Buy rating and $195 target.
- Colin Sebastian, Lazard Capital: “We have consistently highlighted that Amazon’s remarkable revenue growth would inevitably run into margin pressures, and limit profit growth relative to consensus expectations that baked in linear growth in margins,” he writes. “However, Q3 results reported last night and lower Q4 profit guidance indicate that Amazon continues to invest in growth initiatives, including Kindle and Zappos awareness. While we are maintaining a Hold rating, we believe that AMZN remains a core Internet holding, and that a scarcity of large-cap growth stocks places a premium value on shares.”
- Douglas Anmuth, Barclays: “Given the strong Q4 revenue outlook - 3% above consensus at the mid-point - we are not overly concerned about some continued near-term spending,” he writes. Anmuth also asserts that Amazon is likely to get into the subscription movie streaming business to compete with Netflix, and that some costs related to that move could be reflected in Q4 guidance.
- Imran Khan, J.P. Morgan: “Amazon retains immense runway to gain market share, both from online and brick-and-mortar competitors, as it expands selection,” he writes. Repeats Overweight rating; target up a buck to $199.
- Youssef Squali, Jefferies: He repeats his Buy rating, boosting his target to $185, from $140. “Q3 is a repeat of Q2 with faster year-over-year revenue growth and lower margins on increased investments,” he writes. “While these investments are yielding faster growth, lack of guidance on their scale renders visibility into margins blurry, and with it short-term stock performance. We recommend purchase, especially for patient investors.”
- Jim Friedland, Cowen: “We believe the majority of the incremental expenses are due to its ramp in fulfillment capacity and free/fast shipping programs,” he writes. “In addition, we think the rapid growth of younger categories that have not yet reached scale are weighing on international margins. Last, we think there is a small possibility that Amazon has incorporated content licensing costs for a potential subscription video service in Q4 guidance.”
- Mary Meeker, Morgan Stanley: She repeats her Overweight rating, lifting her “base case” target to $175, from $160. She expects to operating margins stabilize in the second half of 2011 as investment spending on new fulfillment centers subsides.
- Jeetil Patel, Deutsche Bank: He repeats his Buy rating, lifting his target to $186, from $145. “We remain buyers of shares of Amazon on the overnight weakness, particularly as the near-term investment in fulfillment, coupled with healthy unit growth rates, should yield improved operating profit dollar growth in future quarters,” he writes.
- Jason Helfstein, Oppenheimer: Repeats Outperform rating; target to $186 from $162. “Our positive view on AMZN shares is based on our long-term expectation of compounded share gains—increasing share of eCommerce, while eCommerce gains from bricks and mortar.”
- Stephen Ju, RBC Capital: Repeats Outperform rating; target to $188, from $181. “The key question facing investors is how long this investment cycle will last; we believe the heaviest spending will be behind AMZN by Q1 ‘11 and expect operating margin expansion in Q2.”
- Brian Pitz, UBS: Buy rating; target to $195, from $165. “AMZN continues to deliver impressive growth.”
- Gene Munster, Piper Jaffray: Overweight rating; target to $168, from $166. “Amazon is best positioned to remain the global leader in online retail over the next 3-5 years.”
Amazon Rebounds Despite Margin Issues; To Take On Netflix? - Tech Trader Daily - Barrons.com)
