The fan boys at Bofa/Merrill (God I hate that fucking name) are out tonight, supporting the shit numbers that Amazon put forth. No mention of their absurd $100-700 mill operating net income guidance–just boolish talking points.
Maintain Buy; A setback but not a thesis changer While 4Q was disappointing, our long-term thesis is based on Prime drive market share gains (Prime customers grew a healthy 51% in 2016) and AWS valuation creation (higher than expected AWS margins suggest bigger long-term profit potential) and we believe our thesis is intact. We see Amazon as the best 3-4 year growth story in the sector on eCommerce penetration and cloud adoption, with a potential market cap of $500bn. We think 1x our 2016E GMV (over $200bn estimated) plus 5x our 2016E AWS revenues (over $12bn in estimated) could provide some valuation support.
Actually, I’m gonna walk back what I said in the first paragraph. Paul Bieber, likely the Father of Justin, said the $100-700 mill guidance was “neutral to positive.”
That makes sense. Nothing inspires confidence like a 700% range in possible earnings outcomes. It’s like playing a leisurely game of Russian Roulette, only with your money–instead of your brain.
Bieber maintained a $775 p/t.
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I can’t believe “Bieber” and “hate that fucking name” were independent.
Rules don’t apply to Amazon…”Don’t Stop Believing” & they get a pass because everyone knows the formula works – until it doesn’t…and investors will be last ones to know when the rug is pulled out beneath them.
I’ve never understood how AMZN maintains its lofty valuation. As a consumer of their products, I love them. But as a business…
ahem, its a paltry $750 target by sir beiber, fly