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Amazon: Q3 earnings

Summary of Amazon's earnings for its third quarter, following which shares were down 6% immediately after results in post-market trading (9.03pm London time).

 

Revenue

Earnings per share

Expected

$20.84 billion -$0.75

Actual

$20.6 billion -$0.95

 

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Amazon shareholders might finally be running out of patience. They’ve seen sales growth of incredible magnitude in recent years but the absence of profits, and indeed the increasing scale of losses, means that they are finally starting to get restless. It seems Amazon’s penchant for buying up small companies is beginning to backfire, given that the stock price has dropped by more than 10% after recent earnings reports.

If the company can’t convert its sales into profits we could be about to witness a major re-rating of the share price. On a forward PE of 245 and trading at 1.5 times sales, the shares look severely overpriced. Investors haven’t cared until now about these metrics, but a 33% drop in the share price from all-time highs suggests they have finally woken up.

Support is now holding at $280, as it did in late August 2013, but a drop through here would target $265. A continuation of the bounce looks to head towards $300 if momentum can be sustained.

Here is a full list of US stocks that can be traded outside New York Stock Exchange trading hours of 2.30pm to 9pm (London time).

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