R.J. Hottovy: Heading into Amazon's first-quarter results, we believe investors should be focused on three areas: one, the pace of the company's revenue growth; two, the level of the company's investments; and three, some of the company's earlier-stage businesses.
With respect to revenue, Amazon opened themselves up to questions about the pace of growth during its fourth-quarter earnings conference call, where it guided to 10%-18% growth in the first quarter. This is down from 20% in the fourth quarter and 31% for all of fiscal 2018. While some of the decline can be explained by the shift to third-party sales as well as some disruption in its India market, some investors question whether or not the company is facing more intense competition. While this might be true, we do think the company will come in towards the higher end of this guidance led by a continued shift to a third-party marketplace as well as continued growth within its AWS segment.
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R.J. Hottovy does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.