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Hightower Advisors’ Stephanie Link can’t stop buying Amazon.com Inc (NASDAQ:AMZN) with the stock trading at its most attractive valuation in years.
What Happened: “I like it a lot,” Link said Wednesday on CNBC’s “Fast Money Halftime Report.” “It’s trading at 13 times EBITDA and historically it’s traded at over 20 times EBITDA.”
The investment strategist, who said she bought Amazon shares for the second time in a week, noted that the Seattle-based firm has a lot of ways to win. Amazon Web Services (AWS) should see an acceleration from the 12% growth the company reported last quarter, Link said. She told CNBC that she anticipates 15% to 16% growth when Amazon reports fourth-quarter results and that number could climb in the second half of the year.
“They signed a whole bunch of new customers after the quarter closed so that’s why I think you are going to see an acceleration,” Link said.
Amazon can also win with margins, she said. Retail margins are on the rise and there’s still more the company can do to help lift margins, especially as costs come down, she added.
Amazon increased spending during the Covid-19 pandemic to meet fulfillment demand, but that spending is done, which gives the company significant operating leverage, she said.
“And I think the consumer is on fire. Look at retail sales last week: 9.4% was online. So I think that they’re clearly continuing to see momentum,” Link said.
Amazon can also win with advertising. Ad revenues were weak last year, but are expected to turn around in 2024.
“Probably for the whole sector, the whole FAANG complex of course, but I think that it’s underappreciated at Amazon,” she added.
Amazon is the clear favorite among Wall Street analysts for 2024. Several other members of the Halftime Report panel also spoke favorably about the Jeff Bezos-founded company this week.
Virtus Investment Partners’ Joe Terranova suggested that he may be buying Amazon stock next week when he rebalances the Virtus Terranova U.S. Quality Momentum ETF (NASDAQ:JOET).
AMZN Price Action: Amazon shares are up more than 60% over one year. The stock was up 0.74% at $157.18 at the time of publication, according to Benzinga Pro.
Photo: courtesy of Amazon.
