Amazon: get ready for earnings

On Thursday, April 26, after the market close, the largest online retailer in the world Amazon will publish its quarterly earnings.

General information:
Amazon is one of the largest online retailers in the world. After the publication of quarterly reports on October 27, 2017, Amazon's capitalization grew by 62 billion (!), Which is the third largest one-day capitalization increase in the History of the stock markets. As a result, Amazon CEO Jeff Bezos became the richest man in the world - his capital reached 93 billion.

The fundamental background of the company is also extremely positive. Amazon, in fact, revolutionized the retail industry by translating it into on-line. And the company clearly does not plan to stop, continuing to strike the Wal-Mart Stores Inc and Target Corporation (it's mostly about the takeover of Whole Foods Market, Inc. and the invasion to the holy of holies of physical retailers).
What to expect from the financial results of the company and what to do in terms of trading? We will try to answer these questions in order of priority.
The financial results of the previous quarter were simply magnificent: sales grew by 38% (compared to the same period last year) to $ 60.5 billion, while operating income soared by 69%. EPS was $ 2.16 with an average forecast of analysts of $1.85 (that is, it was better than market expectations of more than 15%).
So, the expectations of the current financial results are more than optimistic.
Net sales for the first quarter are expected to be between $ 47.75 and $ 50.75 billion, which is equivalent to 34-42% growth rate (against the same period last year). EPS is expected to be $ 1.8 with revenue of $ 49.88 billion, which corresponds to the highest limits of the company's forecasts.
In addition to the overall financial results, the attention of investors will also be focused on individual segments. In particular, on the Amazon Web Services. This cloud segment demonstrates phenomenal growth rates (45% per year) and already brings the company about $ 5.1 billion in revenue.
One more thing to consider. Acquisition of the Whole Foods Market seems to have turned out to be a very good idea. Thanks to this, Amazon's grocery sales grew by 50% (!).
It is also worth paying attention to the company's forecasts regarding the results of the second quarter. It is important to obtain confirmation of the positive dynamics of the main financial indicators.
As for the possible threats, Trump remains the main one today (his periodic verbal attacks on the company are quite painful for the Amazon). But knowing the temperament of Trump, you should not take his words as a guide to action.
What to do with Amazon shares? Before answering this question, let us cite one fact: the company's shares in 2018 increased by 33%. At the same time the US stock market index SP500 “is under water”. This is the best evidence in favor of buying Amazon stocks. Given the presence of a pronounced uptrend in the long-term dynamics of the shares, as well as an exceptionally positive fundamental background, we recommend buying Amazon shares. Goals around $ 1800- $ 2000.