Home Stock Amazon stock forecast after issuing cost warning for Q4

Amazon stock forecast after issuing cost warning for Q4


On Friday, Amazon.com Inc. (NASDAQ:AMZN) shares fell by nearly 4% after missing FQ3 expectations on revenue and earnings. The company announced its most recent quarterly results Thursday after markets closed. Amazon also issued a cost warning for FQ4 amid supply chain constraints.

Amazon posted FQ3 GAAP earnings per share of $6.12, missing the average analyst estimate of $8.98. On the other hand, revenue for the quarter grew by 15.3% from FQ3 in 2020 to $110.81 billion, $850 million below estimates. 

The company issued revenue guidance in the range of $130 billion to $140 billion for the holiday season quarter. But warned supply chain constraints could bump the costs higher.

Amazon’s exciting growth

Although Amazon shares trade at steep valuation multiples of 60.07 P/E and 52.14 forward P/E, its growth prospects could gain the attention of long-term investors.

Analysts expect its earnings per share to grow by 81.90% this year, before rising at an average annual rate of about 37.13 over the next five years.

Therefore, with the stock up just 3.24% over the last 12 months, it could be the perfect time to time to bet on the company’s exciting outlook.

Source – TradingView

Technically, Amazon shares seem to be trading within a gently ascending channel formation in the intraday chart. However, the stock pulled back on Friday after finding resistance at the 100-day moving average. 

Nonetheless, with shares far from reaching oversold conditions, the pullback could continue for the foreseeable future.

Therefore, investors could target extended declines at about $3,174, or lower at $3,028. On the other hand, $3,474 and $3,634 are crucial resistance zones.

Ignore short-term turbulence?

In summary, although Amazon shares continue to trade in a choppy pattern formation, the long-term outlook is still exciting. 

Therefore, although the stock pulled back after finding resistance at the 100-day MA, it could bounce back before reaching oversold conditions, ahead of the busy holiday season.

The post Amazon stock forecast after issuing cost warning for Q4 appeared first on Invezz.

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