Amazon.com, Inc. (AMZN) Earnings Fall Well Short of Expectations – Shares Plunge in After Hours

Share
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Shares of Amazon.com, Inc. (NASDAQ:AMZN) were trading up close to 9% this afternoon as investors anxiously awaited the company’s fourth quarter numbers. With optimism in the air as trading closed on the day, a rather bleak report has caused the stock to go in the other direction after hours. Shares are down a staggering $83.32 or 13.11% as we publish this information, after the company missed estimates by a large margin.

While analysts were expecting Amazon.com, Inc. (NASDAQ:AMZN) to report an EPS of $1.56 on revenue of $35.93 billion, the company reported an EPS of just $1.00 on revenue of $35.75 billion. While revenue for the quarter was nearly in-line with expectations, EPS missed by more than a third. With this said, the cloud computing unit of the company has grown quite a bit over the last quarter despite the company’s wild spending. Investors now need to determine if earnings matter quite yet, or if Amazon.com’s (NASDAQ:AMZN) philosophy of spending the majority of their revenue on growth is a solid strategy.

The stock increased 8.91% or $52 during the last trading session, hitting $635.35. About 10.97M shares traded hands or up 117.23% from the average. AMZN has risen 30.80% since June 23, 2015 and is currently uptrending. It has outperformed the S&P500 by 39.67%.

From a total of 26 analysts covering Amazon.com (NASDAQ:AMZN) stock, 22 rate it a “Buy”, 0 a “Sell”, and 4 a “Hold”. This means that 85% of the ratings are positive. The highest target price is $900.0 while the lowest target price is $525. The mean of all analyst targets is $734.31 which is 15.58% above today’s ($635.35) stock price. Amazon.com was the topic of 64 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Susquehanna initiated shares on January 15 with a “Positive” rating. M Partners initiated shares with a”Buy” rating and a $800.0 target share price in their report from a December 15. Monness Crespi & Hardt downgraded AMZN stock in a recent report from January 4 to a “Neutral” rating. Barclays Capital maintained the rating on December 1. Barclays Capital has a “Overweight” rating and a $850 price target on shares. Finally, Macquarie Research maintained the stock with a “Outperform” rating in a report they issued on a December 22.

The institutional sentiment increased to 1.49 in Q2 2015. It’s up 0.37, from 1.12 in 2015Q2. The ratio increased, as 67 funds sold all their Amazon.com, Inc. shares they owned while 376 reduced their positions. 166 funds bought stakes while 493 increased their total positions. Institutions now own 325.29 million shares which is 4.94% more than the previous share count of 309.99 million in 2015Q2.

Huntington Steele Llc holds 23.61% of its total portfolio in Amazon.com, Inc., equating to 103,872 shares. Tiger Global Management Llc owns 3.19 million shares representing 20.13% of their total US portfolio. Moreover, Tybourne Capital Management Hk Ltd has 18.16% of their total portfolio invested in the company, equating to 504,001 shares. The Washington-based Brighton Jones Llc has a total of 17.93% of their portfolio invested in the stock. Telemark Asset Management Llc, a Massachusetts-based fund reported 100,000 shares owned.

Since May 4, 2015, the stock had 0 buys, and 11 sales for a total of $27.04 million in net activity. Stonesifer Patricia Q sold 6,250 shares worth $3.16M. Wilke Jeffrey A sold 5,908 shares worth $3.16M. Reynolds Shelley sold 720 shares worth $381,752. Olsavsky Brian T sold 2,098 shares worth $1.11 million. The insider Zapolsky David sold 2,322 shares worth $1.23M.

Amazon.com, Inc. is an e-commerce company. The company has a market cap of $272.93 billion. The Firm sells a range of services and products through its Websites. It has 921.65 P/E ratio. The Company’s products are offered through consumer-facing Websites, which include merchandise and content that it purchases for resale from vendors and those offered by third-party sellers.