Amazon.com Inc. (NASDAQ: AMZN): Most Valuable Brand of 2018
“The AWS services are by far the most evolved and most functionality-rich. AWS lets developers do more and be nimbler, and it continues to get even better every day. That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row.”
– said Jeff Bezos, Amazon founder and CEO
[Image Source: Creative Commons Images]
Summary:
- Q1 report and forward outlook for 2018
- Expanding Plans for 2018
- Most Valuable Brand Ranking of 2018
- Valuation Analysis
- About Amazon.com
During the year of 2017 Amazon.com experienced a cash flow increased 4% to $18.2 billion for the trailing twelve months, compared with $17.5 billion for the trailing twelve months ended March 31, 2017. Amazon.com managed to improve its financial positions and is expected to continue growing in 2018.
On April 26, 2018, Amazon.com announced its first quarter report for 2018. Net sales increased 43% to $51.0 billion in Q1, compared with $35.7 billion in Q1 of 2017. Operating income increased 92% to $1.9 billion, compared with operating income of $1.0 billion in first quarter 2017.Net income was $1.6 billion in Q1, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in Q1 of 2017.
Second Quarter 2018 Guidance and outlook
- Net sales are expected to be between $51.0 billion and $54.0 billion, or to grow between 34% and 42% compared with second quarter 2017. This guidance anticipates a favorable impact of approximately $1.2 billion or 320 basis points from foreign exchange rates.
- Operating income is expected to be between $1.1 billion and $1.9 billion, compared with $628 million in second quarter 2017.
As was stated before and is shown above, one can see Amazon’s EPS were above the estimation with actual EPS of 3.27 compered to estimated EPS of 1.26.
Expanding Plans for 2018
In just a few years, Amazon grown from a handful of software developers and scientists to a team of more than 1,200, inventing new skills and products on behalf of millions of customers around the world
On May 1st, 2018 Amazon.com announced that it is expanding Boston Tech Hub to create an additional 2,000 technology jobs. Amazon’s expansion will build upon the hundreds of jobs they already have in R&D, fulfillment centers and robotics and will benefit Boston’s growing and thriving workforce and business landscape.
Amazon’s teams in the Boston mainly focus on Alexa, Amazon Web Services (AWS), and audible. The Boston-based machine learning scientists and engineers contribute to improving the experience of customers interacting with Alexa, leading the industry in its shift toward conversational artificial intelligence through innovative R&D in machine learning.
Amazon will be expanding into 430,000 square feet in this project – a 7.6 million square feet development– and is planned to open its doors of its new office in 2021. This will allow the company to double its tech workforce in Boston.
In addition to Amazon’s expanding it was recently ranked as the Most Valuable Brand of 2018. It was ranked more valuable than Apple and Google’s brands. Up 47% from its 2017 value, Amazon is the largest online business by market capitalization and revenue. Amazon’s brand value is now estimated to be worth $150.8 billion, higher than Apple’s brand value of about $146.3 billion and Google’s brand valuation that is only $121.9 billion.
Top 10 most Valuable Brands of 2018
| 2018 Rank | Brand | Value | 2017 Rank |
| 1 | Amazon | $150.8bn | 3 |
| 2 | Apple | $146.3bn | 2 |
| 3 | $120.9bn | 1 | |
| 4 | Samsung | $92.3bn | 6 |
| 5 | $89.7bn | 9 | |
| 6 | AT&T | $82.4bn | 4 |
| 7 | Microsoft | $81.2bn | 5 |
| 8 | Verizon | $62.8bn | 7 |
| 9 | Walmart | $61.5bn | 8 |
| 10 | ICBC | $59.2bn | 10 |
Valuation Analysis
Amazon.com Inc. is expected to continue growing in 2018. Thanks to big sales associated with its Alexa voice assistant and its other electronics, the results from its cloud-computing business, AWS, were obvious and contributed much more to the company’s record profit total. I believe that Amazon has a good chance to become the first trillion-dollar company within the next few years because it is now expanding globally and increasing its brand value.
In the chart above one can see that the company grew significantly in the past year and since November 2017 till today is above the market by about 45%. For that time Amazon managed to satisfy the market needs and increased its value in the market.
The company’s stock is excepted to continue growing, since it is above the market by 47%, according to the chart. Looking at the company’s most recent performance moves we see that recent movement are telling different stories about price movement in different time periods. Between March 2018-April 2018, the value of the company went down, as showed, about 10% drop. In April the company’s stock value started growing again and going forward to 3 months ahead or even to year-to-date I assume that the company’s value will rise and increase its performance even more than now. I believe that the company is implying new and improving strategies to increase value for the long term based on the price hike in April 2018.
According to analyst recommendations from Yahoo Finance, the current consensus is a “Buy” in Amazon Stock, with 15 advising a “Strong Buy”, and 28 advising a “Buy”.
I Know First addressed the question of whether Amazon will be able to demonstrate the same and improved performance as its officers announced for the year of 2018 with an Algorithmic Bullish Forecast for AMZN.
Past I Know First forecast success with Amazon
On June 8,2017, Know First described two reasons why Amazon’s stock will stay above $1000.
AMZN is with about 63% gain since this bullish forecast.
This bullish forecast for AMZN sent to the current I Know First subscribers on June 8,2017.
I Know First Algorithm Heat-map Explanation
This indicator represents the predicted movement direction/trend. The signal strength indicates how much the current price deviates from what the system considers a balance or “fair” price.
The signal strength is the absolute value of the current prediction of the system. The signal can have a positive (increase), or negative (drop) sign. The heat map is arranged according to the signal strength with strongest up signals at the top. The table colors are indicative of the signal. Green indicates to the positive signal and red indicates a negative signal. A deeper color means a stronger signal and a lighter color equals a weaker signal. The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.
Predictability measures the importance of the signal. The predictability is the historical relationship between the prediction and the actual market movement for that particular market. For each asset this indicator is recalculated daily. Theoretically the predictability ranges from minus one to plus one. The higher this number is the more predictable the particular asset is. In comparison to different time ranges, predictability will be higher for longer time. This means that longer-range signals are more accurate.
Predictability is a unique indicator of the I Know First algorithm which allows users to focus on the most predictable assets according to the algorithm. One should focus on predictability levels significantly above 0 in order to trust the signal, when ranging between -1 and 1.
About Amazon.com
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through physical stores and retail Websites, such as amazon.com, amazon.ca, amazon.com.mx, amazon.com.au, amazon.com.br, amazon.cn, amazon.fr, amazon.de, amazon.in, amazon.it, amazon.co.jp, amazon.nl, amazon.es, and amazon.co.uk. The company also manufactures and sells electronic devices, including kindle e-readers, fire tablets, fire TVs, and echo devices; and provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as their own branded Websites; and programs that allow authors, musicians, filmmakers, app developers, and others to publish and sell content. Further, the company provides compute, storage, database, and other AWS services, as well as fulfillment, publishing, digital content subscriptions, advertising, and co-branded credit card agreement services. Additionally, it offers Amazon Prime, a membership program, which provides free shipping of various items; access to unlimited streaming of movies and TV episodes; and other services. It serves consumers, sellers, developers, enterprises, and content creators. The company was founded in 1994 and is headquartered in Seattle, Washington.
