After the financial report was released on Friday, Amazon closed down 5.38%, and the total market value once again fell below the $800 billion integer mark. Amazon's share price closed at $1626.23, down at least 20% from the highest record of $2050.50 in 52 weeks, meaning that it entered a bear market.
The stock had previously entered the bear market in December last year. At some point last year, the stock reached a market value of $1 trillion in intraday trading.
The financial report shows that the growth of the three major profit sources such as Amazon Cloud Services continued to slow down. The Prime-related growth rate was only half of that in the third quarter, and the revenue guidance for the third consecutive quarter was less than that of Wall Street. The growth rate of the first quarter guidance was the lowest since 2001.
Earnings per share (EPS) of US General Accounting Principles (GAAP) in the fourth quarter was US$6.04, an increase of over 61% year-on-year, and the market expectation was US$5.56.
Fourth quarter operating income of $72.4 billion, an increase of 20%, is expected to be about 71.9 billion US dollars. In the fourth quarter, AWS's operating income was US$7.43 billion, up 45% year-on-year, and 46% year-on-year in the third quarter.
In the fourth quarter, AWS operating profit was US$2.18 billion, which was higher than FactSet survey analysts' expectations of US$2.09 billion, accounting for 58% of the company's total profit, accounting for 56% higher than the third quarter, and the profit margin was 29%, lower than the third quarter. 31.1%.
Amazon expects revenue of $56-60 billion in the first quarter of 2019Analysts expect $60.99 billion.
In a number of research reports after Amazon’s fourth-quarter earnings report, Wall Street analysts expressed concern about the increase in Amazon’s capital expenditures and the imminent entry into force of a new Indian law. The Indian law is about to take effect and will prevent foreign online retailers from selling products through affiliates.
According to reports, some of the obstacles facing Amazon's e-commerce market in India have led to a slowdown in international sales growth and may have affected the company's performance in the first quarter of 2019.
Olsavski said on the conference call: "The impact of changes in Indian government rules on the e-commerce industry there is very uncertain." Our main problem and main concern is to minimize the impact on Indian customers and distributors. ”
Although Wall Street analysts have slightly lowered their target prices for Amazon stocks, analysts seem to have confidence in the stock.
JPMorgan Chase & Co. Doug Anmuth lowered Amazon's target price, he wrote: “The uncertainty of the Indian business, coupled with the higher fourth-quarter base, accelerated the growth of revenue in early 2019. No longer possible. But we still expect Amazon's revenue to grow 18% this year and revenue to grow 30%. We hope that the company will invest in long-term growth opportunities. ”
On the other hand, Deutsche Bank analyst Lloyd Walmsley raised the target price and said: “We believe that Amazon will eventually expand its physical business significantly, further Entering the healthcare and shipping/logistics sectors to further open up its potential markets. Although the stock price fluctuates greatly, we believe the company's market value is still convincing. ”