Amazon (NASDAQ:AMZN) stands as one of the most influential and recognizable companies globally, having revolutionized both the e-commerce and cloud computing industries. However, the company now faces the challenge of outpacing the unprecedented growth it experienced during the height of the Covid-19 pandemic.
In Q2 2024, for instance, revenue rose by 10% to $148 billion – a significant slowdown when compared to the 40%-plus growth seen in 2020 and 2021, not to mention it fell below Street estimates.
Despite the slowdown, one top-rated investor, known as Kody’s Dividends, believes Amazon’s growth story is far from over.
“Amazon is a business that’s executing exceptionally well. Each aspect of the company recorded healthy growth in the second quarter,” writes Kody, who sits in the top 1% of all TipRanks’ stock pros.
“Amazon’s focus on providing the best price, selection, and convenience for customers continued to pay dividends. That pushed unit sales, advertising sales, and subscription services sales higher in the quarter,” the investor added.
Moreover, Kody emphasizes that Amazon has multiple growth catalysts on the horizon. Its dominance in e-commerce continues to expand globally, capturing a growing share of total sales.
Amazon Web Services (AWS) also shines as a major growth driver. “As the global lead in cloud computing, AWS is the most obvious beneficiary” of global IT spending, Kody notes.
From Kody’s perspective, these strong fundamentals make Amazon an attractive buying opportunity, especially given that shares are trading at what the investor believes is 40% below fair value based on Price-to-Operating Cash Flow.
Assuming that the investor’s math is on point and Amazon matches its growth consensus, the web giant is looking at “a blistering 114% upside ahead by the end of 2026.” For now, Kody rates AMZN shares a Strong Buy. (To watch Kody’s Dividends’ track record, click here)
Wall Street analysts echo this bullish sentiment, with TipRanks data showing Amazon as a Strong Buy. The stock’s consensus target price of $222.88 implies a return potential of 19%. (See AMZN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
