Set Sights on This E-Tailer in 2023

Despite a looming recession, the company is expecting a +10% revenue increase in 2022

Managing Editor
Dec 30, 2022 at 11:19 AM
facebook X logo linkedin

Subscribers to Chart of the Week received this commentary on Sunday, December 18.

Rate hikes and the Federal Reserve have remained in focus as we head into the holiday season, especially as Big Tech firms shift into large layoffs to deal with rising costs. One of the bigger names that brought attention to the layoff trend is e-tailer, Inc. (NASDAQ:AMZN). Following a long downtrend, stock has recently found stable support near its 2019 lows in the high $80 range. The security is also holding the -50% year-to-date level, which presents a discount opportunity for AMZN buyers, especially as the company stands as a top member of the cloud services industry.

Inflation has hit Jeff Bezos’ mega-cap name especially hard due to FX headwinds, with the U.S. dollar rising as the company’s European revenues fell. In addition, the expansion of operating expenses has weighed on shares. In simpler terms, any incoming inflation relief in the near future could boost profits substantially.

The company is also slashing capital expenditures (CapEX) to increase the free cash flow (CF) and enhance profitability in the second half of 2022. This may continue into 2023, and given a higher CF/CapEX ratio, could fund the acquisition of new, longer-term assets. In fact, the stock’s price/sales ratio is declining, and nearing 1.66. When the ratio sat near this level in the past, which was from 2014 to 2015, it laid out a tremendous buying opportunity in the long-term.

Even further, despite a looming recession, the company said it’s expecting a +10% revenue increase in 2022. A broader look shows the tech giant’s Amazon Web Services (AWS) model is expected to grow 27% year-over-year, over the next five years. It also does not come as a surprise that the security is a market leader in e-commerce and cloud infrastructure (as mentioned above), by 37.8% and 34%, respectively. In other words, this leadership pushes AMZN above and beyond any incoming competition.

Moving into technical analysis, our Schaeffer's Volatility Scorecard (SVS) is a lagging indicator that measures a stock's realized volatility against the volatility expectations priced into that equity’s options over the past year. Currently, stock sports an SVS of 88 out of a possible 100, indicating the security tends to outperform said expectations – a boon for buyers.



Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI