U.S. Markets closed

Amazon.com, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Simply Wall St
·4 min read

A week ago, Amazon.com, Inc. (NASDAQ:AMZN) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$96b, some 3.8% above estimates, and statutory earnings per share (EPS) coming in at US$12.37, 66% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Amazon.com

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, Amazon.com's 47 analysts are now forecasting revenues of US$444.0b in 2021. This would be a huge 28% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 28% to US$44.66. In the lead-up to this report, the analysts had been modelling revenues of US$436.0b and earnings per share (EPS) of US$44.56 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$3,794, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Amazon.com at US$4,500 per share, while the most bearish prices it at US$3,360. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 28%, in line with its 24% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So it's pretty clear that Amazon.com is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Amazon.com analysts - going out to 2024, and you can see them free on our platform here.

You can also see our analysis of Amazon.com's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.