Hightower Advisors’ Stephanie Link is fervently buying Amazon.com Inc AMZN with the stock trading at its most attractive valuation in years.
Recent Developments: “I like it a lot,” Link said on CNBC’s “Fast Money Halftime Report.” “It’s trading at 13 times EBITDA and historically it’s traded at over 20 times EBITDA.”
Link, the investment strategist, has been lately accumulating Amazon shares, emphasizing that the Seattle-based firm has various avenues for growth. Highlighting Amazon Web Services (AWS), she projected an acceleration from the 12% growth reported in the last quarter. Link anticipates 15% to 16% growth in the forthcoming fourth-quarter results, with potential further upticks in the latter half of the year.
“After the quarter closed, they signed a slew of new customers, suggesting an imminent acceleration,” Link explained.
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Besides AWS, Link pointed out potential margin expansion, particularly in retail. With retail margins on the rise, Link believes the company has more room for margin improvement, especially as costs recede.
During the peak of the Covid-19 pandemic, Amazon ramped up spending to meet surging fulfillment demand. However, according to Link, that spending phase is over, providing the company with significant operating leverage.
“And I think the consumer is on fire. Look at last week’s retail sales: 9.4% was online. So I think that they’re clearly continuing to see momentum,” Link remarked.
In addition to margins, Amazon is also poised to gain from advertising. While ad revenues were lackluster last year, a positive turnaround is expected in 2024.
“Probably for the whole sector, the whole FAANG complex of course, but I think that it’s underappreciated at Amazon,” she highlighted.
Amazon appears to be the clear favorite among Wall Street analysts for 2024, with several members of the Halftime Report panel expressing favorable views on the Jeff Bezos-founded company.
Virtus Investment Partners’ Joe Terranova hinted at a potential purchase of Amazon stock next week during the rebalancing of the Virtus Terranova U.S. Quality Momentum ETF JOET.
AMZN Price Movement: Amazon shares have surged more than 60% over the past year. At the time of publication, the stock was up 0.74% at $157.18, according to Benzinga Pro.
Photo: courtesy of Amazon.