Lazard notes Amazon recently reported solid 17% growth in peak-day holiday orders, and a 44% increase in units shipped from the company's fulfillment centers, which they believe supports their view that Amazon will continue to gain share with a strong customer value proposition, broad product selection, and low prices.
However, they believe the cost of maintaining above-market growth will become evident in declining profit margins, and they are comfortable with their below consensus EPS estimates for 4Q and 2009.
Given the lack of visibility into consumer spending trends in the months and year ahead, they expect Amazon to provide a wide initial guidance range for 2009 revenues and operating income. While the shares are still down ~50% YTD, they believe the recent 40% appreciation in AMZN may not reflect a more challenging growth and profit outlook.