Amazon heading in right direction, says Moody’s

A new report from Moody's Investors Service informs that although online retailer Amazon’s third quarter numbers were disappointing for the market, the company is heading in the right direction. The report considers that Amazon's third quarter earnings were strong, when viewed over the longer term and in the context of pay offs from high upfront investments.

“More immediately, the company should deliver excellent fourth-quarter results as it reaps some of the near term benefits of its extensive investment program," the report observes.

According to Moody’s, revenues are most likely will grow at least 22 per cent in the fourth quarter, however, the increasing discount war, will test the margin resolve of the world’s biggest online retailer.

Flat with last year's fourth quarter result, this would still be a strong performance given the extent to which Amazon has accelerated its investments in growth,” the report added.

Amazon is continuing to spend considerable amounts to build its content ecosystem, which is critical to attracting and maintaining Prime members.