It was another monster quarter for Stock Advisor pick Amazon.com
Bulls may be celebrating the bottom-line explosion, but let's not dismiss the feat on the top line. Take a look at how sales have been growing over the most recent quarters.
Amazon.com |
Year-Over-Year Sales Growth |
---|---|
Q1 2006 |
20% |
Q2 2006 |
22% |
Q3 2006 |
24% |
Q4 2006 |
34% |
Q1 2007 |
32% |
Q2 2007 |
35% |
Q3 2007 |
41% |
See that? Save for this year's opening quarter, the company's net sales growth rate has accelerated with every passing quarter. Sure, the company had a little wizardry helping it this time around. Scholastic's
Acceleration fans will likely be let down in the current quarter, but Amazon is no slouch in projecting net sales growth of 33% to 36% for all of 2007. On the high end, Amazon would have its biggest percentage spurt in sales since 2000. On the low end, it would still be the third consecutive year of accelerating sales on an annual basis.
This all sets up Amazon nicely as it heads into the seasonally potent holiday quarter.
Sure, volatility is part of owning a piece of Amazon. The shares rocketed 10% higher yesterday, in anticipation of a blowout quarter. The stock then gave most of that gain back last night in after-hours trading. The company did, in fact, beat Wall Street's profit targets. However, there was a whole lot of optimism baked into the stock before the numbers were announced. The company's guidance for the current quarter offers a wide range when it comes to operating profits, with margins possibly contracting on the low end.
Amazon is clearly the e-tail bellwether worth envying. Despite its girth, the company is still growing more quickly than smaller chains RedEnvelope
Shareholders may not be all that envious of the volatility, but it's hard to bet against the company as it heads into the holiday quarter with a head full of steam. The company really hasn't been growing this quickly since the sudsy days of 1999 and 2000.
It's a different Amazon this time around. Profits, free cash flow, and a balance sheet that sports more cash than long-term debt are all things that Amazon lacked during the dot-com bubble days.
It's the Amazon that investors back then thought they would never see -- much to the bears' chagrin.
The greatest of Amazon's latest: