Amazon, Twitter, Mastercard Share This Winning Growth Trait

Amazon, Twitter, Mastercard Share This Winning Growth Trait

Amazon (AMZN) has a history of choppy profits, but late Thursday the e-commerce and cloud-computing giant delivered yet another quarter of accelerating earnings growth and revenue gains. IBD 50 stocks SVB Financial (SIVB), Twitter (TWTR), Mastercard (MA), SolarEdge Technolgies (SEDG) and Ilumina (ILMN) also boast at least two quarters of faster sales and earnings growth. Amazon Amazon reported earnings per share of $3.27, more than double analyst forecasts. Looking to Q2, analysts see a massive 485% EPS gain. Keep in mind that Amazon is very late-stage base, after several big moves in recent years. Twitter's earnings growth has accelerated for 5 straight quarters, from -31% to -22% to 0% to 11% to 73% to 129%. SVB Financial's earnings and revenue growth have accelerated for five straight quarters. Mastercard The credit and debit card giant has reported two straight quarter of accelerating earnings growth and three quarters of faster sales growth, with year-over-year gains 33% and 20%, respectively. Mastercard rival Visa (V,) also an IBD 50 stock, reported better-than-expected earnings last week, with EPS and revenue growth accelerating from the prior quarter. For Visa and Mastercard, recent trading history suggests that pullbacks to the 50-day or 200-day lines are better entries than traditional buy points from breakouts.

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Amazon (AMZN) has a history of choppy profits, but late Thursday the e-commerce and cloud-computing giant delivered yet another quarter of accelerating earnings growth and revenue gains. IBD 50 stocks SVB Financial (SIVB), Twitter (TWTR), Mastercard (MA), SolarEdge Technolgies (SEDG) and Ilumina (ILMN) also boast at least two quarters of faster sales and earnings growth.

Amazon is not an IBD 50 stock but it already boasts a best-possible 99 Composite Rating. The Composite Rating combines several proprietary IBD ratings into a single score. All-time stock winners often have a Composite Rating of at least 95 near the start of their big runs. SVB Financial and SolarEdge Technologies also have 99 Composite Ratings. Twitter and Mastercard have 98 CRs while Ilumina boasts a 97 CR.

Accelerating earnings growth is an extremely bullish trait. Ultimately earnings drive stock gains. Faster profit gains show that a company has real momentum. The faster sales growth suggests real demand, not just cost-cutting or accounting games.

Amazon

Amazon reported earnings per share of $3.27, more than double analyst forecasts. Year-over-year, EPS rose 121%. That was the third straight quarter of accelearting earnings growth after 40% in Q4 2017, 0% in Q3 and -78% in Q2. Sales growth accelerated for a fifth straight quarter, sprinting 43% to $51.04 billion.

Being able to ramp up growth rates despite massive size is especially impressive. And Amazon isn’t done. Looking to Q2, analysts see a massive 485% EPS gain.

Of course, Amazon could have had solid, consistent profit growth years ago, but CEO Jeff Bezos focused on efforts to boost sales and market share. That’s paying off. After recently revealing that Prime memberships have topped 100 million worldwide, Amazon said Thursday that it will hike its Prime fee $119 a year.

Amazon stock shot up to a record 1,638.10 Friday morning, but faded to 1,572.62. Intraday, Amazon cleared a 1,617.64 cup base buy point but closed below that level. It did settle above an alternate entry from a 1,568.62 flawed cup-with-handle pattern. But investors probably should wait for the stock to move back above Friday’s high as a buying opportunity.

Keep in mind that Amazon is very late-stage base, after several big moves in recent years. Late-stage breakouts are less likely to be big winners and more likely to…

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