Amazon Earnings Versus Inflation via /r/wallstreetbets #stocks #wallstreetbets #investing

Amazon Earnings Versus Inflation

That pop AH seemed a little odd to me. Considering inflation was 6.2% in October, 6.8% in November, and 7% in December, and Amazon only walked away with a 24% increase in revenue, this leaves me a little puzzled. Especially considering this all went down during the holiday season.

Let’s take a look at Amazons 2021 Quarterly Revenue:

  • $108.5B – Q1 21
  • $113B – Q2 21
  • $110.8B – Q3 21
  • $137B – Q4 21

Since I don’t have a breakdown of monthly revenue, I want to take the $110B earned in Q3 and see what it equates to adjusted for inflation compared to Q4 dollars:

(October inflation was 6.2%)

(November inflation was 6.8%)

(December inflation was 7%)

So by comparison, Amazon’s Q4 earnings weren’t much larger in terms of value than Q3, it’s just a mirage of inflation. The inflation adjusted increase equates to a 2% increase in value. It’s also important to note that the holiday shopping season is notoriously good for retail as people spend money on shit they don’t need. Even though it was believed that the majority of shoppers bought early (Q3) to beat the covid rush for the holidays, it seems that it is only partially true.

Looking forward to Q1 22 I don’t believe it’s possible that Amazon will outdo itself on earnings for three reasons.

  1. Holidays are over, less impulsive spending
  2. An increase in membership fee didn’t fare well for Netflix
  3. With inflation and stagnating wages, people have less disposable income.

No position on Amazon. I am all cash waiting to buy in on the big dipper.

Submitted February 04, 2022 at 05:56AM by good-wolf
via reddit