Amazon Share Price Forecast March 2022 – Time to Buy AMZN?

Shares of global online retailer Amazon (NASDAQ: AMZN) are in the green today, after closing at $2947.33 as of March 15^th (19:59 EST). Amazon shares have decreased by nearly 18% this year. However, its long-term prospects make it a good growth stock.

Amazon – Technical Analysis

Amazon’s financial statement indicates a market cap of $1.5 trillion with total assets worth $420.549 billion. Revenue for 2020 was at $469.82 billion with a profit margin of 7.10% compared to $386.06 billion in 2019.

Oscillators such as Relative Strength Index (14)(48.62), Stochastic %K (14, 3, 3)(54.33), Commodity Channel Index (20)(−39.26), Average Directional Index (14)(28.48) and Awesome Oscillator(−109.77) are neutral. Moving averages such as Exponential Moving Average (10)(2901.41),  Simple Moving Average (10)(2879.80), and Exponential Moving Average (20)(2945.18) are indicating a buy action.

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Recent Developments

Amazon’s online retailing business remains in a strong competitive position and still offers customers a combination of fast delivery and low prices. Last year, profitability was affected by higher costs for wages and North American sales increased by 18.4% to $279.8 billion. Operating income decreased to 16% to $7.3 billion. The company’s management has fixed its first-quarter guidance at 4.5% to 9.5% companywide sales growth after excluding foreign exchange effects. It also expects operating income to decrease to between $3 billion and $6 billion from $8.9 billion in the year-ago period.

Amazon is set to acquire the iconic Hollywood film studio MGM. The $8.45 billion offer to buy the studio includes its catalogue of more than 4000 films including hits such as classic franchises James Bond and The Pink Panther. The deal, which has already received regulatory approval from the European Union’s antitrust regulator, is waiting for a nod from The U.S. Federal Trade Commission.

MGM has an already deep catalogue that will provide Amazon Prime with a wealth of content to keep its customers engaged. During the fourth quarter, Amazon Prime attracted customers in record numbers.  With all major streaming video services competing to secure exclusive rights to content, Amazon Prime is expected to rank along with Netflix and Walt Disney as one of the top streaming providers by 2026. The MGM acquisition will also justify its move to raise the monthly cost of Prime by $2 to $14.99.

 

Should You Buy AMZN Shares?

Amazon will certainly benefit from the price increase for its Prime membership announced recently. It increased the annual fee by $20 to $139. This represents the first increase by the company in 4 years and comes amidst high inflation. On the other hand, Amazon’s AWS sales increased by more than 37% to $62.2 billion. It has been responsible for generating almost three-quarters of Amazon’s 2021 operating profit. Additionally, Amazon’s advertising sales totalled $9.7 billion, up 32% from last year.

Investors shouldn’t be worried about Amazon not experiencing its high-flying growth days. E-commerce sales in the U.S. increased by 9.4% compared to a year ago and accounted for roughly 13% of total retail sales. Amazon, which has about a 40% share of the market, is on the path to achieving 17% growth in online sales for 2022.

Some other segments such as its advertising sales and the highly profitable AWS segment will also help it grow. Amazon has recently announced a 20 for 1 stock split, which gives growth investors a good opportunity to pick up Amazon shares.

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