May 29, 2018

AMZN – Market expectations are for a recovery in Uniform ROA, but management has concerns about Prime and AWS


 

      • Amazon.com Inc. (AMZN:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 118.1x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about Prime and AWS
      • Specifically, management may have concerns about their digital entertainment options offered through Prime, and may be exaggerating their claim that customers are moving more and more of their workloads to AWS at a faster pace. Additionally, they may be exaggerating their satisfaction with customer reception in Q1, and may lack confidence in the sustainability of Prime growth in India
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