Amazon: Future Growth Potential

Seeking Alpha2021-09-29

Summary Amazon is making strong progress in the international markets in both revenue and margin metrics. Two main reasons for improvement in margins could be better advertising revenue base and ...

网页链接

免责声明：本文观点仅代表作者个人观点，不构成本平台的投资建议，本平台不对文章信息准确性、完整性和及时性做出任何保证，亦不对因使用或信赖文章信息引发的任何损失承担责任。

精彩评论

PC21
2021-09-29
PC21
Growing bigger.
- PC21:
  world wide biz
不是那么好割的小韭菜
2021-09-29
不是那么好割的小韭菜
Cool
- shshsh999:
  okk
NPC69
2021-09-29
NPC69
Like
Onlyme
2021-09-29
Onlyme
Like please!
- Shishir:
  done

发表看法

{"i18n":{"language":"zh_CN"},"isChannel":false,"data":{"share":"https://www.laohu8.com/m/news/1194967114?lang=zh_CN&edition=full","thumbnail":"","is_english":true,"pubTime":"2021-09-29 19:19","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"1194967114","market":"us","top_or_hot":-1,"title":"Amazon: Future Growth Potential","media":"Seeking Alpha","content":"<div>\n<p>Summary\n\nAmazon is making strong progress in the international markets in both revenue and margin metrics.\nTwo main reasons for improvement in margins could be better advertising revenue base and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4457607-amazon-future-growth-potential\">网页链接</a>\n\n</div>\n","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Amazon: Future Growth Potential</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAmazon: Future Growth Potential\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-29 19:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4457607-amazon-future-growth-potential><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nAmazon is making strong progress in the international markets in both revenue and margin metrics.\nTwo main reasons for improvement in margins could be better advertising revenue base and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4457607-amazon-future-growth-potential\">网页链接</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AMZN","symbol_name":"亚马逊","start_time":0,"source_url":"https://seekingalpha.com/article/4457607-amazon-future-growth-potential","article_id":"1194967114","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1194967114","pubTimestamp":1632914389,"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nAmazon is making strong progress in the international markets in both revenue and margin me","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AMZN":"亚马逊"},"translate_title":"亚马逊：未来增长潜力","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMZN":0.9},"content_text":"Summary\n\nAmazon is making strong progress in the international markets in both revenue and margin metrics.\nTwo main reasons for improvement in margins could be better advertising revenue base and higher subscriptions in international regions.\nAmazon is making higher investment in Europe, Latin America, India and other regions to replicate its success in the domestic US market.\nThe international market will become more important for Amazon stock in the next few quarters as the US market reaches close to maturity.\n\n4kodiak/iStock Unreleased via Getty Images\nAmazon’s (AMZN) push in the international regions has finally given good results after years of showing operating losses. In the recent quarter, the trailing twelve-month operating margin for international regions was 1.9% in comparison to negative 1.3% in the year-ago quarter. This swing of 3.2% took place while the net sales in international regions have been higher than in North America.\nEven prior to the pandemic, the company was reporting a positive trend in the improvement of operating margins in the international regions. This improvement is on the back of its advertising business which continues to grab market share in the digital ad segment from Google (GOOG)(NASDAQ:GOOGL)and Facebook (FB).\nAmazon is also showing expansion in subscription base due to highly attractive Prime membership costs in various international regions. These trends should allow Amazon to continue its progress in the international markets. Faster growth in international markets will improve the growth runway for the company and provide a good tailwind to Amazon stock.\nMargin improvement in international regions\nAmazon reported operating income of $1.6 billion in the international region for the first half of 2021. In the year-ago period, the operating income was negative $52 million. During the same time period, the consolidated operating income of Amazon has increased from $7.8 billion to $15.8 billion. Hence, improvement in operating income of international regions contributed to 20% of the total growth of operating income during the first half of 2021 on a Y/Y basis. As the revenue share and margins of international markets increase, we should expect a bigger contribution to incremental operating income in the next few quarters.\nFigure 1: Improvement in operating income for international regions in the first half of 2021. Source: Amazon Filing\nIt remains to be seen how the future margin trends are in international regions once the pandemic is controlled. But Amazon has also been making strong progress in two key segments in the international regions. Amazon has replicated its advertising tools and platform in international markets which have allowed the company to gain high margin digital ad business. At the same time, Amazon has reported strong Prime membership growth in key international regions.\nFigure 2: Continuous improvement in TTM operating margin over the last few quarters in the international segment. Source: Amazon Filing\nKey to Amazon’s success\nAmazon has been providing Prime membership at very attractive price points in the international regions. In Australia, Prime membership is available at AUD$59 per year or USD $42. In India, Prime membership cost is INR 999 per year or $13.5 per year. At the same time, Amazon has frontloaded all the Prime benefits in these regions. Customers can get quick delivery and also use Prime Video and Prime Music services. Amazon is also investing heavily in local content which should help the company expand the addressable market in international regions.\nThe Prime Video service will probably be the major driver for Prime membership growth in the next few years as the company invests heavily in expanding its original content. In 2020, Amazon invested close to $11 billion in the streaming business. This could increase substantially as the over-the-top (OTT) market grows in the domestic and international regions. Amazon has a big advantage over other streaming providers because of its entire ecosystem. Hence, even good enough streaming content by Amazon gains greater traction in the customer base.\nAmazon has also built a strong advertising business in international regions by replicating the tools for its US business. This improves the scalability of Amazon’s business and adds a very high margin segment.\nAmazon’s subscription and advertising business have been growing at a high rate for the past few quarters. The expansion in international regions provides a boost to these numbers as the US market nears saturation in terms of Prime membership base.\nValuation of international business\nThe net sales metric for international business shows TTM revenue of $124 billion. On the other hand, the North America segment had net sales of $266 billion in the trailing twelve months. Hence, the international segment is already contributing over 45% of the revenue compared to North America segment. The international segment also provides the company with a very long growth runway.\nIt is difficult to value every individual international market for Amazon but we can find a close figure by looking at some of the peers. For example, Amazon and Walmart's (WMT) Flipkart have almost equal online e-commerce market share in India. Flipkart was bought by Walmart at a valuation of $22 billion in 2018. Walmart is now looking to list Flipkart at a valuation of $50 billion. It should be noted that Flipkart does not have strong services like Prime membership, AWS, Amazon Pay, and others. It also does not have a streaming business and most importantly it does not have an advertising platform comparable to Amazon.\nHence, it is likely that Amazon’s India standalone operations would be valued at a massive premium to the $50 billion sought by Flipkart. Amazon India is also investing heavily to build the Amazon Pay platform and improve its market share within the digital payment ecosystem. Flipkart has spun off its digital payments platform called PhonePe. In a recent funding round, PhonePe raised $700 million at a post-money valuation of $5.5 billion. If Amazon Pay is able to gain market share in this highly competitive digital payments market it should be another major boost to the valuation of Amazon’s India business and also be a big tailwind for Amazon stock.\nFigure 3: Increase in the revenue share of international operations in the recent quarter due to higher growth. Source: Amazon Filing\nAmazon is similarly showing strong progress in other international regions like Latin America, UK, Europe, Australia, and others. The growth in these regions and improvement in margins should help Amazon in building a better growth story for its stock. Investors should keep a close eye on the international business of Amazon in the next few quarters to gauge the future growth potential of the stock.\nInvestor Takeaway\nAmazon has shown very high growth rates in the international region in the past few quarters. The operating margin in international regions has also improved which has boosted the overall operating income of the company. Amazon has replicated its strong Prime subscription business and advertising platform in international markets. This has helped the company improve the growth potential of these high-margin segments.\nA big chunk of the total valuation of Amazon would be coming from important international regions like Europe and India. This makes it important to find the growth runway of Amazon's services in these markets.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":862750538,"gmtCreate":1632917768785,"gmtModify":1632917769073,"author":{"id":"4087611507686430","authorId":"4087611507686430","authorIdStr":"4087611507686430","name":"PC21","avatar":"https://static.tigerbbs.com/a62d208e3b3c4a550849feaa8117655b","vip":1,"crmLevel":3,"crmLevelSwitch":0},"htmlText":"Growing bigger.&nbsp;","listText":"Growing bigger.&nbsp;","text":"Growing bigger.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/862750538","repostId":1194967114,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6037650,"gmtCreate":1632917800627,"gmtModify":1634782459338,"authorId":4087611507686430,"author":{"id":4087611507686430,"authorId":4087611507686430,"name":"PC21","avatar":"https://static.tigerbbs.com/a62d208e3b3c4a550849feaa8117655b","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":862750538,"type":1,"supId":0,"prevId":0,"content":"world wide <u>biz</u>","text":"world wide <u>biz</u>","html":"world wide <u>biz</u>"}],"langContent":"CN"},{"id":862720154,"gmtCreate":1632916414976,"gmtModify":1632916415550,"author":{"id":"3558920222538997","authorId":"3558920222538997","authorIdStr":"3558920222538997","name":"不是那么好割的小韭菜","avatar":"https://static.tigerbbs.com/904e087829710bbff7692246e238149c","vip":1,"crmLevel":3,"crmLevelSwitch":0},"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/862720154","repostId":1194967114,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6037582,"gmtCreate":1632917164247,"gmtModify":1634782464554,"authorId":3581559287302283,"author":{"id":3581559287302283,"authorId":3581559287302283,"name":"shshsh999","avatar":"https://static.tigerbbs.com/9d90e2141ae1f9fb485478e3c1cc3f75","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":862720154,"type":1,"supId":0,"prevId":0,"content":"<u>okk</u>","text":"<u>okk</u>","html":"<u>okk</u>"}],"langContent":"CN"},{"id":862782372,"gmtCreate":1632914748757,"gmtModify":1632914769341,"author":{"id":"3584779133668268","authorId":"3584779133668268","authorIdStr":"3584779133668268","name":"NPC69","avatar":"https://static.tigerbbs.com/47e7ac55312ae8dd1c9e7cb92adad089","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/862782372","repostId":1194967114,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":862786778,"gmtCreate":1632914670365,"gmtModify":1632914763604,"author":{"id":"3578395069533223","authorId":"3578395069533223","authorIdStr":"3578395069533223","name":"Onlyme","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0},"htmlText":"Like please!","listText":"Like please!","text":"Like please!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/862786778","repostId":1194967114,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6037623,"gmtCreate":1632917389623,"gmtModify":1634782461515,"authorId":3577771722524346,"author":{"id":3577771722524346,"authorId":3577771722524346,"name":"Shishir","avatar":"https://static.tigerbbs.com/5bbb5ffb9814e2b46f518ffcbf85ff64","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":862786778,"type":1,"supId":0,"prevId":0,"content":"<u>done</u>","text":"<u>done</u>","html":"<u>done</u>"}],"langContent":"CN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":22,"commentSize":4,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":false,"deviceId":"web-server-community-laohu8-v3","version":"4.26.2","shortVersion":"4.26.2","platform":"web","vendor":"web","appName":"laohu8","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1194967114"}