Buy this stock before it takes off in 2023!

January 2nd, 2023, written by Crazy Miser

HOWARD SCHNAPP/NEWSDAY RM VIA GETTY IMAGES

Key points:

Trading at a very attractive valuation
Earnings beat in struggling economy
Cuttings costs
Holiday sales

Analysis

Amazon is the top e-commerce company and one of the biggest cloud service providers around the world. They expanded their revenue by nearly 15% year over year in their Q3 earnings report during a weak economy. They have taken measures to cut costs, such as, layoffs, canceling warehouses, and shutting down Amazon Care. Despite this, retailers selling through Amazon reached sales hitting $1 billion across their Thanksgiving weekend. In stores, 123 million people participated in in-person shopping. Amazon continues to expand it's AWS footprint to reach customers in the Asia Pacific Region, in Thailand, Middle East, and the UAE region. Also, they introduced their first-ever Prime Early Access shopping event during October 11-12 only for Prime members where customers could find hundreds of thousands of deals in all best-selling categories. Also, they announced the availability of AWS IoT FleetWise to collect and transfer vehicle data to the cloud in near real time for automakers, suppliers, and fleet operators. We believe Amazon will beat most analysts expectations for Q4.

Valuation

We believe Amazon is undervalued at it's current price due to it's price-to-sales ratio of approximately 1.8, which has not hit these levels since 2014. We believe Amazon offers a low risk, high reward due to the current sales multiple and future growth prospects. We believe the stock would be fairly valued between $135-160 per share.

Technical Analysis

Webull.com - Amazon Weekly Chart Webull Desktop

Webull.com - Amazon Monthly RSI Webull Desktop

This past year, Amazon had it's greatest decline since the dot-com bubble in 2001 and the Global Financial Crisis of 2008. According to the measured move and weekly RSI, there may be more downside in the short term, but it's impossible to time the bottom. However, with the monthly RSI near the lows from the dot-com bubble, makes us believe the stock is about to take off over the next year based on the fundamentals, attractive valuation, overly bearish analysts, and technical analysis.

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