Amazon (AMZN) PT Raised to $800 at RBC Capital

RBC Capital analyst Mark Mahaney reiterated an Outperform rating and boosted his price target on Amazon.com (NASDAQ: AMZN) to $800.00 (from $715.00) in wake of Beat & Raise Q1 EPS results. He sees it as an Inflection Point Quarter.

Mahaney commented, "AMZN grew Q1 revenue 29% ex-FX to $29.1B, well ahead of the Street/RBC @$28B. Upside came from all three segments – North American Retail, International Retail & AWS, but especially the first two. Retail growth driven by Prime Flywheels -- see our 9/11/15 ULT report. AWS growth driven by industry dynamics and leadership position – see our 1/14/16 ULT report. Dramatic GAAP EPS beat ($1.07 vs. $0.58 Street) driven by record-high Gross Margin (35.2% -- scale, 3P, AWS) and by 8-year high GAAP Operating Margin (3.7%-- leverage in Fulfilment, Tech & Content, and G&A). Q2 Revenue & Operating Profit Guides well above the Street. An Inflection Point Quarter, indeed."

The Quarter Keys:

1) Really Robust Revenue Trends…North America Retail grew 27% Y/Y (second-fastest growth in 3 years); International Retail grew 26% Y/Y ex-FX (fastest growth in over 3 years); & AWS grew 64% ex-FX (almost same as Q4);

2) Strong Segment Margins…NA Retail Margin @ record 5.4% & AWS Margin @ 28% -- sure, that was down Q/Q, but it still means that AMZN has the best Revenue Mix Shift Story in Tech: Emerging Segment growing 2X Core rate with 5X Margin Profile;

3) Very Solid Metrics…27% Unit Growth, 12% Active Customer Growth; &

4) Very Strong FCF -- $6.4B on a TTM basis

For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.

Shares of Amazon.com closed at $602.00 yesterday.

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