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Amazon's Quarter Was A 'Full-On Crusher'

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Amazon.com, Inc. (NASDAQ: AMZN) reported a second quarter EPS of $0.19 versus the Street estimate of $(0.14).

Wall Street reacted positively to the beat, raising the stock by as much as 17 percent in after hours trading.

"Revenues are quite a bit higher," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "Usually the EPS number can be a little messy. The revenue number is hard to mess with. Revenue is $23.18 billion versus $22.39 billion. They're beating by $1 billion. Operating cash flow increased 69 percent to $8.9 billion for the trailing 12 months. That's a strong increase."

Udall said that he would be surprised if any analyst had modeled that number that high.

"That looks pretty solid to me," he said. "If the EPS number is correct, it's a full-on crusher."

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Amazon 'Basically' Invented The Cloud

Global Equities Research analyst Trip Chowdhry focuses specifically on Amazon's cloud business, which he praised up and down. He also criticized other tech companies and their "lazy CEOs," which only offer buybacks and dividends.

"Basically, any person with a single-digit IQ can do that," Chowdhry told Benzinga. "Share buybacks and dividends do not change any person's life. Now let's look at AWS. Since 2006 Amazon has been investing heavily in cloud computing. Basically, Amazon invented it."

Chowdhry said investors should stop and think about how many "conventional businesses" have been diminished by Amazon.

"What were those companies saying? Think about IBM, Oracle, HP, Salesforce.com -- they were laughing," said Chowdhry. "Just three years, four years back, all these guys [said], 'What does a bookseller know about cloud computing?' We have seen the results."

Chowdhry also criticized CEOs who waste time hyping an underperforming product or service.

"Have you seen Amazon AWS blowing hot air at every person? No," said Chowdhry. "Amazon cloud does not have a single Cisco router. They make everything themselves. Amazon.com has their own secret sauce at every stage and in every piece of their technology."

Finally, Chowdhry noted that the so-called innovators of tomorrow (such as Airbnb) are using Amazon Web Services.

"Today a bookseller is setting the tone of the computing industry," Chowdhry concluded. "Many of the startups are running on Amazon. No other company in the past or in the future will have that strategic asset that these guys have. There's a difference between a talker and there's a difference between a doer."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Latest Ratings for AMZN

DateFirmActionFromTo
Aug 2019AssumesBuy
Jul 2019MaintainsOutperform
Jul 2019MaintainsOutperform

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

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