>Amazon.com (AMZN:Nasdaq - news) was off 4% following its analyst's meeting yesterday.
Robinson Humphrey analyst Russ Miles was upbeat following his trip to Reno, Nevada, site of Amazon's new distribution center. He wrote that while he still had concerns about the company successfully deploying its model globally, "we do believe that management's confidence allayed fears about whether or not the company will be successful." Miles wrote that investors have a "second chance" to buy Amazon shares at current levels "and realize tremendous returns in the next 12-18 months."
"This company continues to realize enormous top-line growth and, coupling that with a cost structure beginning to demonstrate the power of scale, we have a potentially explosive period coming in the next six quarters," Miles wrote. "If your investment horizon is that long, buy shares now to make sure you don't miss the opportunity if evidence begins to reveal itself sooner than anticipated."
Not quite so bubbly was Deutsche Banc Alex. Brown analyst Jeetil Patel, who maintained a market perform rating on the stock after the meeting. "While we found the analyst meeting quite informative, we remain concerned from a stock perspective into the timing of breakeven earnings, much less profitability, from an investment standpoint," he wrote. "The company did not provide any guidance on the timing of breakeven earnings. However, focus on proving out the economics of the core e-tailing model appears to be increasingly important to management with expense controls (i.e. holding costs stable) and increased order volumes (i.e. scale) representing two key tenets in achieving this objective." |
