Jason Del Rey

Recent Posts by Jason Del Rey

Amazon’s Stock Soars on Q3 Revenue Beat, “Blodget-Like” Price-Target Upgrades

jeff bezos with Kindle Fire HDX

Amazon’s stock price was up more than 10 percent this morning, to $366, thanks to the company’s third-quarter earnings report, which saw Amazon beat revenue expectations for the first time in a year and a half, as well as Wall Street analyst price-target upgrades.

Mark Mahaney of RBC Capital pushed his firm’s price target to $425 from $330, he said in a research note this morning.

“$425 Price Target feels Blodget-like and carries risk, but the inflection point in AMZN’s fundamentals seems clear, the company’s market opportunity seems increasingly large, and management’s track record (including a 6% operating margin from ’03-’10) gives confidence,” he wrote.

The “Blodget” reference, of course, is to the 1998 prediction by Henry Blodget — then a Wall Street analyst — that Amazon would hit $400 a share. It did, before its stock price dove as the dot-com bubble burst. (Thanks to several stock splits since then, that $400 prediction now amounts to less than $100 a share today.)

RBC is estimating that Amazon’s revenue will grow at a compound annual rate of 21 percent over the next two years, and that it will continue to grab more market share in online retail, based on its solid mobile offerings and its hard-to-beat warehouse and delivery network.

As Blodget himself wrote this morning, Stifel’s Jordan Rohan also bumped up Amazon’s target price to $400.

Now, imagine what would happen if Amazon actually consistently turned a profit.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik