Investment strategist Stephanie Link continues to show strong confidence in Amazon.com Inc (NASDAQ:AMZN) as its stock trades at historically attractive valuations. Link, expressing her optimism, emphasized that the e-commerce giant’s current valuation at 13 times EBITDA represents a compelling opportunity, considering its historical trading multiples above 20 times EBITDA.
Positive Prospects for Amazon: With a second purchase of Amazon shares within a week, Link highlighted the multitude of growth avenues available to the company. She pointed out that Amazon Web Services (AWS) is poised for acceleration, anticipating a surge from the 12% growth reported in the last quarter and subsequent potential for robust growth rates in the future.
Link noted that increased customer acquisitions post the last quarter’s closure should fuel this anticipated acceleration. Furthermore, she spoke optimistically about Amazon’s margin potential, especially in retail, as cost efficiencies and rising retail margins contribute positively to the company’s financial performance.
Amid decreased post-pandemic spending for fulfillment demand, Link highlighted Amazon’s anticipated significant operating leverage. She also emphasized the robust momentum in consumer behavior manifested by the substantial 9.4% online retail sales growth from the previous week.
Another area of potential growth identified by Link is Amazon’s advertising revenues, which faced weakness last year but are expected to rebound in 2024. She portrayed Amazon as a standout within the broader FAANG complex and highlighted the underappreciation of its advertising potential.
The optimistic sentiment is not limited to Link, as Wall Street analysts favor Amazon for 2024, with several panel members on the Halftime Report echoing favorable views.
Joe Terranova, from Virtus Investment Partners, disclosed a potential inclination toward Amazon stock in the next week’s rebalancing of the Virtus Terranova U.S. Quality Momentum ETF (JOET).
Stock Performance: Despite growing over 60% in the past year, Amazon shares still present an attractive proposition, trading at $157.18 at the time of publication. The bullish sentiment among market experts hints at the untapped potential in Amazon’s stock, especially considering the stock’s recent performance.
Photo: courtesy of Amazon.