Analysts and investors aren't aligning with Amazon (AMZN) despite the stock's fourth-quarter decline so far.
Shares of the e-commerce and cloud king have experienced a 22% slump since the start of the fourth quarter in October even when accounting for the nearly 5% pop in the stock on Cyber Monday. Still, the sentiment on Wall Street and from shareholders indicates a persistent confidence in the stock.
"Trading at just under 60x forward earnings, the valuation [for Amazon] is obviously down significantly from what it was when the stock was hovering in the $2,000 area less than two months ago," the team explained. "Our [bullish] view is more than justified given not only the proven executional excellence of management, but the exposure to several key end markets, all of which we believe remain in secular growth mode."
Amazon is rated a "One" by the team, indicating a strong buying opportunity.
Analysts Add Optimism
Analysts along Wall Street and beyond are optimistic that Jeff Bezos' behemoth is ready to rally for the longer term.
Piper Jaffray analyst Michael Olson called the investment opportunity "a champagne stock on a beer budget," prescribing an "Overweight" rating and a $2,050 price target for the stock.
"The tech downdraft has driven valuations to opportunistic levels for certain stocks," he noted. "In particular, AMZN presents an opportunity for material appreciation in the coming 12-24 months."
Olson said that his analysis of the e-commerce king suggests that the company's projected growth rate has unfairly come into too close a comparison with the bricks-and-mortar retailers it has savaged in its ascendance.
He explained that when accounting for the secular shift toward e-commerce, as well as the numerous opportunities Amazon offers across cloud, advertising, and even pharmacological services, it remains undervalued.
Olson is hardly alone in his optimistic take on the company and its long-term investment thesis. All but one of the 45 analysts covering the stock have "Buy" ratings despite the drop and the analyst consensus price target remains north of $2,000 per share.
So, while Cyber Monday is garnering all of the attention for Amazon in the immediate term and bumping the shares off of their lows, analysts and investors are nearly unanimous in the long-term opportunity still available for investors seeking an entry point.