What Some Of The Big Boys Are Saying About Amazon

Following Amazon.com, Inc.'s AMZN quarterly results on Thursday, many of Wall Street's top analysts chimed in with their take on the quarter.

Credit Suisse: ‘Return To Normalcy' For 2015

Stephen Ju of Credit Suisse commented in a note that a higher-than-expected CSOI dollars and moderating shipping losses served as “confirmatory data” that Amazon's investment thesis will “return to normalcy” in 2015.

Ju also believes that Amazon will continue to reap the margin benefits from fulfillment center maturation and shipping fee savings from its expanded footprint.

The analyst points out that the company's decision to report its AWS segment separately allows investors to refocus on its expanding core retail gross profit margins.

Shares are Outperform rated with a price target raised to $410 from a previous $389.

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Morgan Stanley: Early Signs Of Leverage A Bullish Indicator

Katy Huberty of Morgan Stanley commented in a note that Amazon's results and guidance were “not perfect” but the company delivered more positives than negatives.

Huberty notes that many key metrics improved in the quarter including incremental gross margin of 50 percent; AWS growth accelerated; international EGM growth of 19 percent held steady and North American EGM growth of 27 percent year-over-year remains strong despite significant scale while fulfillment costs decreased for the first time year over year since the third quarter 2012.

The analyst also states that Amazon's original content is proving “fruitful” in driving incremental Prime member spend.

Shares are Overweight rated with a price target of $415, with a valuation upside to $490 under a bull case scenario if AWS trends toward profitability.

Wedbush: Not Convinced Of Growth

Michael Pachter of Wedbush commented in a note that Amazon's revenue was near the high end of guidance with “impressive” cost controls and that its AWS has become a “significant” part of the business.

Pachter notes that with over a million AWS customers, the reach of the service has grown dramatically. The analyst sees the segment's gross margin impact to remain favorable going forward.

However, Pachter believes that the favorable gross margin impact will be offset by Technology and Content spending that will continue to rise as Amazon Instant Video and Amazon Studios acquire more content.

“While recent announcements have given us increased visibility into Amazon's revenue growth, we are not convinced that the company will share sufficient details about future spending to allow us to accurately model profit growth, and it may take time before earnings per share grows sufficiently to justify its share price,” Pachter wrote, while maintaining a Neutral rating and $330 price target.