If you are considering buying shares of Amazon, you may be wondering whether or not its stock is likely to go up. The company's stock is currently trading at a price-to sales ratio of just 26%, and its EPS is projected to rise to $3.61 in the next three years. However, the company's operating income is expected to range from $0-$4 billion, while its share repurchases are scheduled for the fourth quarter of 2022.
Amazon (AMZN) is one of the largest online retailers. Its Q4 revenue and net income rose by 55.3% and 84%, respectively. However, the growth was slow compared to tough year-over-year comparisons. Investors were concerned that the slowdown would impact the company's future. Analysts predict that Amazon's EPS is expected to rise to $3.61 by 2024. But with macro challenges and an uncertain labor market, Amazon's growth could slow down. For now, the stock has recovered. It is up 14.4% in after-hours trading. But investors may need to wait for the company's fiscal 2023 results to see if Amazon can keep its growth momentum.
In the short term, Amazon's growth has been hampered by supply chain and logistics costs. The company also faces wage inflation. Unions could disrupt its control over its warehouse employees. In the longer term, there's room for further growth. Amazon is investing heavily in Prime. The company continues to see high membership renewal rates. In addition, it has added more products to its lineup. It has also expanded the number of exclusive deals it offers.
In its fourth quarter, Amazon increased its workforce by 140K. It spent $13.4 billion on Whole Foods last year. But it still has 1,608,000 part-time employees. And its logistics infrastructure is massive. While the growth was slow, Amazon still beat Wall Street's expectations in both sales and income. The company's margin was 30%.
Amazon's price to profit ratio has become more reasonable
Amazon's price to profit ratio has gone down quite a bit over the last few years, making the stock more competitive than it was just a few years ago. This has made it a tad harder for rivals like Walmart to take Amazon down a peg. However, that isn't to say that the e-commerce giant is going to go down, just not as hard as it used to be.
While it may not be as big as its counterpart in Seattle, it still represents a sizable chunk of the retail pie. As of last month, the company had 416 billion in revenue. It also had a decent operating margin. In the last quarter of the year, Amazon's operating margin hit 5.5%, which is pretty good, especially compared to the days of yore.
The company has a fair amount of hype surrounding it, but its most significant competitor, Walmart, has a larger market cap and a much bigger retail footprint. For comparison, Amazon's retail sales were only a fraction of that of the former, while its retail and cloud computing divisions are each larger than the combined sales of Walmart's two main competitors. The company is also benefiting from the strength of the US dollar. That should translate into more dollars in the bank.
Aside from Amazon's price to profit ratio, the company is also a well-rounded enterprise, thanks in large part to its many subsidiaries. Among them are its e commerce ventures, its nifty gadgets, and its cloud computing operations.
Amazon's share repurchases are expected in the fourth quarter of 2022
Amazon (AMZN) is one of the world's largest companies. It is also the world's largest cloud services provider. The company's e-commerce operations fuelled huge revenue growth over the past decade. The stock fell after reporting weak results for the first quarter of 2022. It reported a loss of $3.8 billion, compared to a profit of $1 billion in the same period in 2017. Although the numbers were lower than expected, it still came in slightly above analysts' expectations.
The Zacks Consensus Estimate for net sales was $156.3 billion, up 8% from the year ago period. Amazon expects fourth quarter sales to grow between 2% and 8%. It also expects total revenues to be between $140 billion and $148 billion in Q4. The company recently announced an all-cash acquisition of iRobot, an electric vehicle (EV) manufacturer. It is also planning to expand into the health care industry. This comes after the company bought PillPack four years ago. In 2022, it will acquire the national primary care company One Medical for $3.9 billion. It will offer health care services to patients in 32 states.
The company has been able to boost its Prime program to drive customer momentum. It has also made significant progress in Alexa skills, which allow consumers to interact with the company's online services. It is also moving into media content and grocery stores. In addition to its retail business, Amazon's AWS segment has also shown impressive growth. It recorded a 27% increase in sales in the third quarter of fiscal 2022, compared to the same period last year.
Amazon's operating income guidance is $0-$4 billion
Amazon's (NASDAQ:AMZN) operating income guidance for the fourth quarter of 2022 fell below Wall Street estimates, causing its stock price to plunge. The company expects to generate between $0 and $4 billion in income for the period. This is a downward revision from the previous consensus of $3.2 billion.
In addition to soaring shipping, fuel, and transportation costs, Amazon is also facing inflationary pressures. Wage rates, as well as the cost of debt, are all rising. In addition, Amazon faces a slowdown in the core retail business. As a result, Amazon is cutting products and services, as well as shutting down a number of divisions. The company also is reportedly freezing corporate roles in its retail business.
Amazon's stock is down 30% this year. While the tech giant's revenue growth was strong last year, its bottom line has been a challenge. The company's shares are currently trading at a 14% discount to the S&P 500 index. The company had a difficult time recouping its investment in Rivian Automotive, which contributed to a net loss for the year. Overall, the company lost $6.6 billion, which is less than the pre-tax valuation of $7.6 billion.
The company is also focusing on its Prime program. Its Prime membership fees have increased to $139 from $119. However, Prime member renewal rates remain consistent. This is part of Amazon's efforts to improve delivery times with one-day shipping.