Amazon (Nasdaq: AMZN) stock is getting an Apple-like bump today.
Shares of the tech stock have shot up 16% since last night’s glowing earnings announcement. The online retail giant reported first-quarter earnings of 28 cents a share, quadrupling analyst forecasts of 7 cents a share.
Revenues of $13.8 billion and operating income of $192 million also outpaced the $12.9 billion in revenues and $186 million in operating income most analysts were expecting. Year over year, revenue increased 34%.
This was a vast improvement over Amazon’s fourth-quarter earnings – at least in terms of how they stacked up with analyst estimates. In the fourth quarter, the company’s revenue fell well short of expectations and the stock tumbled 9%.
Amazon’s revenue and earnings were down sharply in the first quarter, but that was expected. Like most retail companies, the fourth quarter is always Amazon’s busiest three months of the year because of all the holiday shopping.
While Amazon stock has exploded today, its long-term prospects are less rosy. Operating income in the second quarter is expected to fall between 80% and 229% year over year. Despite yesterday’s earnings beat, Amazon still carries an extremely lofty PE ratio of 166.
So while the tech stock is getting a major boost today, its current push may be difficult to sustain.