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AMZN stock is still undervalued, Roth says

The stock has been on a tear for most of 2023, But Roth MKM analyst Rohit Kulkarni thinks there is still money to be made on Amazon (Amazon Stock Quote, Chart, News, Analysts, Financials Nasdaq:AMZN).

After taking a deep dive into Amazon Web Services twelfth annual re:Invent conference in Las Vegas, the analyst said he came away convinced that AMZN is the best “mega cap” tech stock right now.

“We watched 25+ hours worth of keynotes at AWS Re:Invent. AWS sessions tend to have more educational material than Azure & GCP,” he explained. “If you are looking for weekend reading material, we can share 200+ slide grabs from all keynotes. AWS did not overdo the AI buzzword bingo, however, it provided anecdotes, testimonials and launched new products to support the following: “We created Internet’s Tech stack with Cloud. We are best positioned to create the AI Tech Stack.” Mega Cap Picks Order: #1. AMZN, #2. META, #3. GOOGL.”

In a research update to clients December 1, The analyst maintained his “Buy” rating and 12-month price target of $165.00 on Amazon.

Kulkarni thinks Amazon to generate EPS of $2.64 on revenue of $571.4-billion in fiscal 2023. He expects those numbers to improve to EPS of $3.44 on a topline of $623.9-billion the following year.

“Our sum-of-parts valuation implies $1.59tn market cap ($680bn for Retail, $690bn for AWS, and $300bn for Advertising/Other), and our PT implies approx. 15x ‘24E EBITDA. We believe this methodology appropriately attributes value across Amazon’s three business segments with different growth and margin profiles,” Kulkarni concluded.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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