Amazon (AMZN) investors closed off the week with the stock gaining +21.44% the last 5 days, which means it sits at +20.47% YTD.
Here's this weeks news on Amazon - let's go through it together.
2. SORTATION CLOSURE
3. JUNIOR ENGINEERS
4. WEB3 STAFF
5. WHOLE FOODS PRICES
6. PRIME VIDEO DEAL
7. WAREHOUSE SAFETY
LEGEND: Positive News | Neutral News | Negative News
Amazon reported their Q4 2022 earnings this week, and here's a summary on it:
- Revenue $149.2B (beat)
- EPS $0.03 (miss)
- E-Commerce (online) sales $64.5B (miss)
- Physical Retail sales $4.95B (beat)
- AWS Revenue $21.3B (miss)
- Operating Income $2.7B (beat)
Overall, quite a mixed report from Amazon. They are not currently optimized for free cash flow generation as they have been in a heavy investment phase, however this seems to be a priority for them in 2023.
The biggest concern at this moment is AWS slowing growth - still growing, but slowing down from 2021 and 2022. This is in-line with Azure and GCP as well, so it isn't an Amazon-specific issue, but rather an industry slowdown.
Amazon is shutting down a sorting facility, affecting 700 jobs.
The good news is Amazon is offering transfer options to employees for another location.
This is part of their ongoing effort to optimize cost, while still focusing on innovation and investment. This being an older facility got the axe, but the efforts are being moved to a more modern location.
Rumors are circulating from a leaked email internally that Amazon will be limiting their entry level software engineering positions (junior) to students and new graduates.
This great news for current students and new grads who may be concerned about the job opportunities during this economy.
There are many students who want to work for Amazon, and if they can hire them right out of school, they'll be able to train them to be stellar Amazon employees in years to come (at least that's the hope). This also means Amazon can pay less (since it's likely their first job) and still continue investing in R&D.
Amazon is looking to continue growing it's base in Web3.
According to a recent job posting, they are searching for a Senior GTM Specialist (Web3) with the goal to work on growing adoption of Web3 workloads on AWS.
Appears to be an interesting opportunity for those interested in Web3 to explore.
Whole Foods is trying to focus on lowering food costs.
They state that because of inflation cooling, prices should as well (I'm sure most of us would agree with that). It's unclear if Amazon is doing this to pass savings onto consumers, or to keep prices stable in-stores but increase their margins by purchasing from suppliers for less.
If it's the latter, this could be another lever Amazon is pulling to grow their margins and profitability in 2023.
Amazon closed a licensing deal with South African Known Associates with Prime Video.
This deal will give Prime Video exclusive access to over 20 South African movies.
In a statement, Amazon said "We’re delighted to be bringing Prime Video customers this diverse and compelling slate of South African movies from the dynamic team at Known Associate".
This is part of Amazon's effort to expand bigly into Africa - a region that is poised for growth over the coming decades.
Amazon has received 3 more safety citations for his warehouses.
The safety claim states that workers are suffering from musculoskeletal injuries due to the nature of the job.
This has been something we've noticed in recent months where there's more and more stories coming out regarding safety at Amazon sites, but Amazon has stated time and time again their workplace is safe.
Keep an eye on safety - because this could result in more government intervention in coming months.
The FTC is rumored to be preparing an antitrust suit against Amazon.
The reason?
Amazon apparently has anticompetitive business practices.
This is still a developing rumor and nothing is confirmed (if this even becomes official is not confirmed) but worth paying close attention to.
Amazon is closing some of its Amazon Fresh and Amazon Go stores.
Why?
Cost management! The focus for Amazon this year is to optimize costs, and it looks like grocery is the first area of focus (and we saw Amazon raise prices on grocery delivery last week as well!).
Amazon will also pause its expansion on more Amazon Fresh stores while it collects data to determine if this is a good investment to continue plowing money into.
| RATING | PRICE TARGET | FIRM |
| Market Outperform | $140 | JMP Securities |
| Buy | $142 | Truist Securities |
| Outperform | $160 | Evercore ISI Group |
| Buy | $134 | DA Davidson |
| Outperform | $125 | Wedbush |
| Outperform | $150 | Credit Suisse |
| Positive | $150 | Susquehanna |
| Neutral | $106 | Rosenblatt |
| Overweight | $150 | Morgan Stanley |
| Overweight | $142 | JP Morgan |
| Buy | $130 | Benchmark |
| Outperform | $150 | Cowen & Co. |
| Outperform | $135 | Oppenheimer |
| Outperform | $125 | Baird |
| Overweight | $150 | Barclays |
| Buy | $120 | Needham |
| Overweight | $123 | Piper Sandler |
| Outperform | $171 | Credit Suisse |
| Overweight | $130 | Barclays |
We look forward to spending a few minutes with you next Sunday for some new Amazon news!
Disclosure: I am a Amazon.com (AMZN) shareholder at the time of publishing.