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Andy Jassy, CEO of Amazon
F. Carter Smith | Bloomberg | Getty Images
Amazon shares closed 7.5% lower on Friday after the company reported disappointing second quarter results on Thursday and gave weak guidance for the current quarter, suggesting the recent momentum fueled by the pandemic is slowing.
Amazon has warned that it expects slower growth to continue over the next few quarters as it makes difficult year-over-year comparisons with its business during Covid-19 lockdowns.
Many consumers have avoided physical stores in order to prevent the spread of the virus and have flocked to digital retailers like Amazon for essential and non-essential goods during the pandemic. In recent months, the economy has continued to reopen, pushing some shoppers into stores, while spending more on travel and other services.
Investors have acknowledged that slowing growth will put Amazon stocks under pressure in the near term, but several analysts said they remain confident e-commerce as a whole will continue to grow, benefiting Amazon.
“AMZN has declared income and [operating income] which were 2% and 1% below consensus and guided in Q3 below, ”Barclays analyst Ross Sandler wrote in a note to clients on Friday. of the pandemic outbreak is proving difficult for many companies, and despite the deceleration, AMZN continues to add leading members and gain e-commerce shares. This impression won’t derail the bull’s deal in the long run. [Amazon Web Services] and retail, but that probably means we’re in a range for the next few months until a catalyst emerges. “
In a separate note to clients, Baird analysts wrote, “We never like to see a dud.” But they pointed out that Amazon’s superior results in other more profitable segments like advertising, cloud computing and subscription services were the “most notable” feature in the company’s earnings.
“This is the near-recurring pattern that we highlighted as deserving of a higher multiple,” said Baird analyst Colin Sebastian.
Amazon stock is up more than 3% since the start of the year. The S&P 500 rose about 18.6% over the same period.
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