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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (106821)	8/1/2000 9:04:26 AM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Glenn, here's the latest from Kiggen. >AMAZON.COM (AMZN: $36.06)*+ 7/27/00 June Q Topline Below Plan, But Customer Metrics Are Strong Earnings Per Share Old New P/E Ratios (FY:Dec.) 2001E $(0.50) $ NM 2000E (1.08) (1.21) NM 1998A (1.19) Rating: TOP PICK Change: None 12-Mo. Target: $140 We're lowering our 2000 revenue from $2.98 billion to $2.78 billion (Q3 goes from $700 million to $600 million, and Q4 goes from $1.1 billion to $1 billion) to reflect this quarter's shortfall as well as our desire to be more in line with consensus, given the model's lack of predictability. For 2000E we are lowering from ($1.08) to ($1.21), again in line with consensus. In 2001, we're lowering our revenue estimate from $4.7 billion to $4.1 billion, and leaving loss per share unchanged ($0.50). AMZN reported $577.9 million in revenue (+0.7% q/q, +83.8% y/y), $32.2 million below our considerably above consensus $610 million estimate. Revenue was also just under the low end of the $580 to $600 million "whisper" range, and below Amazon's internal target of 90% y/y growth. Loss per share of ($0.33) above consensus of ($0.35) but below our ($0.28) estimate. We're maintaining our beleaguered Top Pick rating. The stock will undoubtedly sell-off on the revenue disappointment and lingering concerns about Joe Galli's resignation, but is likely to bottom near-term. More importantly, Amazon should continue to make steady progress toward profitability throughout the year, and margin expansion and improving customer value metrics are likely to be key drivers of stock outperformance as seasonal strength becomes more visible. AMZN remains a core Internet holding, and we are willing to stay with the story in anticipation of a high quality Q4.