Amazon Shares Hit Record High - Topping Walmart in Market Cap

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Amazon’s share price (NASDAQ:AMZN) hit an all-time high of 580.57 today following its Q2 results for the period ending 30 June. The report indicated a 20% year-on-year increase in revenues to $23.18 for the quarter.

Opinion on the street was that Amazon would report a second-quarter loss. Instead, it announced a $92 million net profit.  The report was so unexpected and surprising that some analysts were issuing what seemed to be apologies, including Barclays which admitting to having been too pessimistic toward Amazon “in the near term.”

Wedbush cited “a faster ramp in AWS profitability and more rapid retail sales growth than we expected previously.”

B. Riley commented that “We had been concerned that rising operating costs would offset revenue generation.”

In addition, Cantor Fitzgerald noted that “While impossible to know for certain, we believe that Amazon is now starting to move away from the heavy build years for its e-commerce business.” Although I agree that it is, indeed, impossible to know for certain, this is, nonetheless, a reasonable assumption.

Adjusted analyst price targets are now as high at $700 per share.

What About Walmart?

Whilst there is still no contest in terms of revenue (Walmart is at $485 billion; Amazon is at $91.96 billion), Amazon has overtake Walmart (NYSE:WMT) in market capitalization with $246.54 billion compared to WM’s $230.53 billion. This makes for some interesting investor-side comparisons, which I hope will whet readers’ appetites to learn more.

Measure AMZN WMT
EBITDA 46.76 7.71
Shares Outstanding 465.67M 3,220.00M
Revenue/ Share 198.52 150.34
Cash 13.78B 7.76B
Debt 17.03B 60.69B

The reason comparison to Walmart is so interesting is that the two companies are beginning to step on each other’s retail toes, especially online. The real questions, in my humble opinion, will be concerning which has the better business model for the future. There is no doubt that both are equipping themselves to dominate online purchasing so the battle may be fun to watch as it unfolds, but how it does should be a different perspective for casual observers than it will be for investors.

Now that analysts have revised their outlooks for AMZN (all are bullish), the expectations are higher. We shall need to remember that as ensuing quarterly earnings are reported. Personally, I have a hunch that, for Amazon much more so than for Walmart, the results are going to be stunning.

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