Decent but far from gift-wrapped results make Amazon (NASDAQ:AMZN) a more-than-prime purchase for bullish investors looking to buy AMZN stock in today’s market.
Late last week, Amazon stock announced earnings. And if you happened to miss the Q1 results, it’s probably because of Wall Street’s rather underwhelming reaction (at least by AMZN standards).
In the report’s immediate aftermath, shares finished the day up a decent, but historically contained, 2.54% as investors and maybe Amazon’s own algorithms sorted out the good from the marginally disappointing.
By the numbers, AMZN stock delivered in spades with a headline profit of $7.09, which easily trumped analyst views of $4.72 per share. But sales growth, while strong, was largely accounted for and showed signs of deceleration.
Overall revenues gained 16.9%, but merely matched Street estimates. Amazon Web Services or AWS also saw an in-line result and growth of 17% dropped precipitously from last year’s 46% same quarter, year-over-year outcome. AMZN’s global online sales grew by 9%. But the single-digit increase was a large drop from 2018’s jump of 34%.
Lastly, Amazon’s cloud service, which remains a driver of revenue growth for the company, nevertheless did see a deceleration in business with an increase of 41% compared to last year’s 49% gain.
Amazon Stock Daily Chart
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So, what now for would-be Amazon stock buyers? My recommendation is to allow for a larger price consolidation to form. Instead of the one-day gratification that so many bullish buyers are used to in this day and age, given where AMZN is off and on the price chart, waiting and having some patience to buy on a pullback makes sense.
Ideally, a simple and shorter decline of a few to several days toward $1,850 before forming a pivot low would make for a “more-than-prime” purchase. Should a pullback of this kind work its way onto the Amazon stock chart, a stop-loss beneath the pattern bottom is paramount for potentially even better entries down the road.
Ultimately, if Mr. Market has different and more overtly bearish plans for AMZN stock, waiting even longer for that truly compelling deep discount looks like a nice trade-off.
Disclosure: Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
