In two (I, II) of my latest articles, I've shown how ChannelAdvisor numbers for January and February of 2013 imply that Amazon.com (NASDAQ:AMZN) is probably tracking below consensus revenue estimates for Q1 2013.
However, given the data presented some might still have doubts regarding how significant this correlation between ChannelAdvisor's and Amazon.com's revenue growth is. Because of this, I'm writing this further article, stating a very simple observation: the direction of ChannelAdvisor's Amazon.com reported growth rate has matched the direction of the Amazon.com revenue growth rate 100% of the time. It has always worked.
Here's the data confirming it
We start with the monthly data reported by ChannelAdvisor (table 1):
From this, we can compute the average quarterly growth rates (table 2):
From the average quarterly rates we can compute how these evolved from quarter to quarter, for instance from Q1 2011 to Q2 2011, the growth rate went from +76.4% year-on-year to +79.2% year-on-year, so on this table we have +2.8%, since the growth rate was 2.8% higher quarter-on-quarter. We're thus left with the table below (table 3):
Next, we get Amazon.com's year-over-year revenue growth rates for each quarter (table 4):
And, like we did with the ChannelAdvisor data, we compute how these evolved from quarter to quarter (table 5):
We are now in a position to observe something curious, which I have already stated. By comparing table 3 to table 5, we can clearly see that Amazon.com's revenue growth rate evolution quarter by quarter has always matched what happened to ChannelAdvisor's data. That is, when ChannelAdvisor's reported growth rate increased, Amazon.com's revenue growth rate also increased. And when ChannelAdvisor's reported growth rate fell, Amazon.com's growth rate also fell.
What can we conclude, then?
Well, we can conclude that since ChannelAdvisor's reported growth rate for Q1 2013 is tracking 5.9% below what it reported for Q4 2012, if this relationship holds, then Amazon.com will necessarily report a year-on-year growth rate in Q1 2013 which will be lower than what it reported in Q4 2012. Since Amazon.com reported a 22% growth rate in Q4 2012, then it will report a growth rate lower than 22% for Q1 2013. And since consensus revenue growth estimates for Q1 2013 stand at +22.6%, it's thus very likely that Amazon.com will come in below consensus regarding its revenue growth rate.
ChannelAdvisor's data has predicted the direction of Amazon.com's revenue growth rate 100% of the time since January 2010. Right now, ChannelAdvisor's data implies a growth rate for Amazon.com's revenues of less than 22% during Q1 2013, which is below consensus estimates.
Disclosure: I am short AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.