Amazon Posts Record-Breaking Holiday Sales: Time to Buy AMZN Stock?

Multiple stacks of coins on top of a graph Credit: Shutterstock photo

Shares of Amazon AMZN popped 5% in morning trading the day after Christmas after the e-commerce powerhouse said that its customers made more purchases worldwide than ever before during the holiday season. The question now is should investors consider buying Amazon stock on the dip as we move into 2019?

Holiday Shopping

Amazon posted record-breaking sales during the vital holiday shopping period, according to a company statement Wednesday. The company sold millions of more Amazon devices, which include the new Echo Dot and Fire TV Stick 4K, compared to 2017.

Overall, Amazon shipped more than one billion items for free as part of its Prime membership offerings in the U.S. alone. Jeff Bezos' firm also saw "tens of millions" of people start their free Amazon Prime trials and begin their paid memberships.

Amazon stock jumped 5% to reach $1,411.10 a share in morning trading Wednesday. Despite this surge, AMZN stock still sat 31% below its 52-week high of $2,050.50 a share. Investors should note that other beaten-down stocks, including Facebook FB and Apple AAPL , also surged as the larger market tries to rebound from a rough December.


Amazon is coming off a Q3 that saw its revenue grow far slower than recent periods. Third quarter sales climbed 29% to reach $56.6 billion, which came in below Q2's 39% surge and Q1's 43% climb. The question for investors is can they find new reasons to be excited about Amazon?

Right off the bat, Amazon is projected to capture approximately 50% of the total U.S. e-commerce market in 2018, up from 44% last year. This should help the e-commerce giant remain strong compared to Target TGT , Walmart WMT , and Costco COST . Meanwhile, Amazon grabbed 35% of the cloud infrastructure services market last quarter, which helped it come in well above second-place Microsoft's MSFT roughly 15%, as well as IBM IBM , Google GOOGL , and Alibaba BABA .


Looking ahead, our current Zacks Consensus Estimate calls for Amazon's Q4 revenues to jump 18.5% to reach $71.61 billion. More specifically, Amazon's cloud computing business is expected to jump roughly 43% from $5.113 billion in the year-ago period to reach $7.298 billion, based on our NFM estimate. For reference, Amazon Web Services revenues surged 46% last quarter and 49% in Q2.

Amazon fiscal 2018 revenues are expected to surge 30.8% to touch $232.69 billion. Peeking ahead to fiscal 2019, Amazon's top line is projected to hit $280.4 billion, which would mark a 20.5% jump above our 2018 estimate.

At the bottom end of the income statement, Amazon's adjusted fourth quarter revenues are projected to skyrocket 154% to reach $5.48 per share. AMZN's full-year earnings are also expected to soar 328.6%. Plus, fiscal 2019's EPS figure is projected to come in 37% higher than our 2018 estimate. It is also worth noting that Amazon's positive earnings estimate revision activity helps it earn a Zacks Rank #2 (Buy) at the moment.

Bottom Line

Amazon's days of insane top-line growth might be over-for now at least. But the firm has some newer businesses that look poised to help it continue to expand.

One with some serious potential is Amazon's digital advertising segment. The company is set to move into third-place this year behind only Google and Facebook. Amazon will continue to grow its ad business as more consumers begin their product searches across its website and app. Plus, Amazon has jumped deeper into the pharmaceutical industry with its PillPack purchase, which should help it challenge CVS CVS and Walgreens Boots WBA .

Amazon is also ready to expand its Prime Video offerings to help it stand out against Netflix NFLX and soon enough Disney DIS , Apple, and AT&T T as we race into what could become an almost completely streaming future. And Amazon has actively grown its brick-and-mortar business, with a focus on its cashierless Amazon Go stores.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

International Business Machines Corporation (IBM): Free Stock Analysis Report

The Walt Disney Company (DIS): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Netflix, Inc. (NFLX): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

AT&T Inc. (T): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

CVS Health Corporation (CVS): Free Stock Analysis Report

Walgreens Boots Alliance, Inc. (WBA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.