Earnings Preview: First Quarter 2009 [[AMZN]] is scheduled to report their first quarter 2009 results after the market closes on Thursday, April 23. Based on our analysis, we at are expecting AMZN to report better than expected results that exceed Wall Street’s consensus expectations.


Analyst Expectations

We are forecasting revenues of $4.79 billion and EPS of $.33. This would represent a 16% increase in revenues from last year’s $4.14 billion in the same period. The current analyst consensus estimates calls for revenues of $4.76 billion and $.31 EPS. On January 29, the company provided first quarter 2009 revenue guidance of $4.525 – $4.925 billion.


While the retail industry continues to struggle in the face of an economic recession, continues to post stellar growth. We expect that revenue growth slowed from last quarter’s 18% rate, but are still expecting a very impressive 16% y/y growth rate. Shoppers are continuing to flock to Amazon’s website, and we believe that traffic growth was up over 20% in the first quarter.


Growth investors appear to be taking notice of Amazon’s strong performance in this tough environment and AMZN’s share are up over 55% since the beginning of the year. Once the economy begins to show real signs of recovery and consumers open up their wallets again, we would expect to see Amazon trading back above $100.


Share Performance

Amazon’s shares are up an amazing 55% since the beginning of the year. Last year, dropped almost 45% as the stock underperformed the 34% decline in the Dow Jones index.



Shares are now trading at 41x consensus 2010 EPS estimates. Amazon’s leadership position has allowed it to consistently trade at a premium to the relative valuations of their peer group. Despite the big run-up that Amazon has already experienced, we would expect shares to appreciate further after a positive earnings report.


Recommendation: Buy with a $95 price target.


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