USB Piper Says Buy Amazon on Weakness
USB Piper says buy Amazon.com (AMZN ) on weakness.
Analyst Safa Rashtchy says weakness is due to expectations of even higher revenue growth. However, he thinks the focus should be on margins and profits. Rashtchy believes a key highlight of second quarter performance was delivering 6% EBITDA margin, which is what he targeted for 2003. He notes this is despite lower prices, a direct result of increased efficiencies, and buying power. Margin growth translates into much higher profits for 2003, making valuation significantly better. Rashtchy raised the $0.11 2003 loss (GAAP) estimate to $0.05 earnings per share. He reiterates his outperform rating and $17 target.
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