Yahoo Finance Amazon stock is still getting beat up after disappointing earnings
Despite a firm Wall Street defense, Amazon (AMZN)'s stock is still under a good deal of pressure following a disappointing first-quarter performance and outlook for the second quarter.
Shares of the tech giant fell close to 3% to $2,408 on Monday, coming in the wake of a 14% post-earnings plunge on Friday. The stock hit a fresh 52-week low on the session.
That Friday sell-off in Amazon erased a startling $20.5 billion in net worth for Amazon founder Jeff Bezos, according to Bloomberg data. Amid the pressure on Amazon's stock, Bezos has been his seen his net worth decline by $44 billion to $148 billion. He is second on the world's richest persons list behind Tesla CEO Elon Musk, who has a net worth of nearly $250 billion.
In many respects, the pullback in Amazon's stock is unsurprising given the earnings day commentary from management after the company's Q1 report missed analyst profit forecasts.
The company said that first-quarter profits were hit by a $6 billion headwind from supply chain inefficiencies and general inflation. Amazon's sales increase of 7% in the quarter, compared to a 44% rise in the same period last year, marked the company's slowest growth rate in more than two decades.
Amazon outlined a potential $4 billion hit to profits in the second quarter from the same factors, and promised to bring spending more in line with sales trends into the back half of the year.
Wall Street stayed bullish on Amazon's stock, but acknowledged the weak quarter by pulling down their financial estimates and price targets on shares.
"Amazon's Q1 results and Q2 guidance were disappointing (sales and operating income) but don’t necessarily change the story, which is that growth should inflect in Q3 and set up for a stronger FY23. Amazon has gone through a major investment cycle, but some unique external factors (COVID, its related effects on labor, inflation, and the company's significant outperformance early in the pandemic) have pushed out the harvesting period that tends to follow. Ultimately, we see those investments, including in supply chain capacity and people, supporting stronger market share gains and helping Amazon navigate the uncertain macro cycle ahead," said Guggenheim analyst Seth Sigman, who maintained a buy rating on the stock.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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