Amazon stock is set for big gains as sales jump 37%
Amazon stock has been under pressure over the past few weeks amid the broader market volatility, but the latest sales report would help in enhancing bullish sentiments. Its third-quarter sales jumped 37% from the year-ago period, with expectations for similar growth in the final quarter.
In addition to sales growth, the world’s largest e-commerce company impressed investors with robust earnings and cash flow growth performance. The company says that they have been witnessing record traffic and shopping trends.
Strong financial numbers back Amazon stock
Although Amazon stock price grew close to 70% so far this year, the majority of analysts expect its shares to trade above the $4000 mark in the days ahead. This is because of improving online shopping trends.
Its third-quarter revenue came in at $96 billion compared to the past year’s revenue of $70 billion. The company turned big revenue growth into hefty profits. Its operating income hit the $6.20 billion level, up 94% from the past year period. Free cash flow surged to $29.5 billion in the trailing twelve months.
“We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season,”
says Jeff Bezos.
The outlook is promising
The company expects to accelerate sales growth in the December quarter. The consumer’s move towards online platforms is likely to increase as the European Union is forcing people to stay at home because of second coronavirus wave.
Amazon expects fourth-quarter revenue in the range of $112 to $121 billion, with an operating income of $4.5 billion.
Amazon stock price is likely to get support from strong financial numbers in the analyst’s views. The majority of analyst expects the dip in Amazon stock as a buying opportunity for value hunters.