Peter Kafka

Recent Posts by Peter Kafka

Who Cares About Cyber Monday? Citi Cuts Amazon Estimates

Yes, Cyber Monday sales were better than expected–up a not-terrible 15 percent. But Citigroup (C) analyst Mark Mahaney has gone ahead and cut his estimates for the world’s leading e-commerce company anyway: He thinks Amazon’s (AMZN) sales will grow seven percent this quarter, down from his earlier estimate of 16 percent growth. And he has cut his estimates for 2009.

The logic here is straightforward: Mahaney believes the numbers that comScore (SCOR) put out about Monday’s e-commerce totals are accurate. But he also believes comScore’s continued prediction of no growth for the holiday period. So he now predicts that Amazon will post revenues of $6.1 billion this quarter, below the Wall Street consensus of $6.5 billion; he’s also knocked down his 2009 estimates by five percent.

Mahaney goes out of his way to stress that he thinks Amazon is a great company for the long haul: “We view AMZN as Core Holding–given management team, market opportunity, market share position/gains, business model & level of innovation. We view its current valuation (5% ’09 normalized FCF yield) as undemanding. Macro environment is materially negative, however.”

Translation: Even the best retailers get beat up in a lousy economy. And people who bought up Amazon after comScore’s release this morning–the stock jumped 10 percent today–may regret it tomorrow.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google