Risk/Reward Rating: Negative
Amazon was the largest beneficiary of the COVID lockdowns by absolute revenue growth. It was the perfect storm for Amazon to take market share. This may be about to change as evidenced by the tone of the just completed Amazon Prime day on June 22, 2021, which was described as “more muted than usual” by CNBC.
Amazon’s revenue growth in 2020 was 38% or nearly double the 20% growth in 2019. The first quarter of 2021 crested at 44% revenue growth versus last year. For a company the size of Amazon, this is an incredible rate of change. The problem for the stock is that the 20% and decelerating sales growth pre-COVID may be more indicative of the sustainable business prospects outside locking down the world’s population for an entire year. The increasing likelihood of a reversion to normal revenue growth sets the stock up for disappointment when reporting results compared to the bumper year of COVID sales.
Continue reading this report with a stoxdox membership.