Despite the ongoing economic impact of the Coronavirus Pandemic, Amazon.com Inc. (NASDAQ: AMZN) has had its most profitable year on record. The company released earnings data this week. Another impressive quarter should keep investor confidence high.
With the holiday season still to come, the company is likely to be one of the best-performing in the retail and technology industries.
Impressive Third Quarter Results Likely to Boost Stock
Amazon’s earnings report exceeded all expectations, reinforcing the fact that it is one of the fastest-growing companies in America. Despite its already massive size, Amazon continues to find new ways to attract consumers and grow its top and bottom lines.
Third quarter revenue came in at $96.15 billion, a 37% increase over the $69.98 billion that was reported this time a year ago. With many retailers struggling in the wake of the Coronavirus Pandemic, Amazon has seen more demand for eCommerce. Its cloud services division is also performing well and remains the largest of its kind in terms of total revenue.
Profit for the third quarter was $6.33 billion, compared to $2.13 billion in the same quarter last year. Analysts had expected earnings of $7.41 per share. Instead, Amazon surprised the markets with earnings of $12.37 per share for the quarter.
High Revenue Expected for the Fourth Quarter
2020 is already the most profitable year ever for Amazon, and there’s still one quarter remaining. The company is on track to exceed all expectations, which should help the stock to retain its position as a growth leader.
The company has offered revenue guidance for the fourth quarter in a range of $112.0 to $121.0 billion. Consumer spending will be a key driver in the next two months. Holiday spending is likely to be high, even if there are more lockdown measures introduced in the U.S. and abroad. Amazon’s large distribution network has shown resilience during lockdowns in recent months. Unlike many other retailers, this company can keep serving its customers when freedom of movement is restricted.
An Impressive Growth Stock for Serious Investors
Amazon isn’t a stock for short-term traders. With individual shares selling for more than $3,100 today, the company attracts growth-focused long-term investment.
There’s still an upside expected, with an average target price of $3,735 from 48 ratings reported on FactSet. 42 of these analysts assign a BUY rating to the stock today.
For its growth potential, this is one of the top mainstream stocks available today. Investors looking to leverage both eCommerce and tech growth can consider this pick in the fourth quarter.
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