Stock Analysis & Ideas

Amazon Earnings Are on the Way; Here’s What This 5-Star Analyst Is Looking For

Several of the tech giants will be under the spotlight this week and come the close of Thursday’s (February 2) trading action, Amazon (NASDAQ:AMZN) will take its turn to deliver Q4’s financial statement.

The shares are off to a flying start in 2023, up by 20% year-to-date, and come in the wake of a difficult 2022 during which the stock shed half of its value. Can the e-commerce giant keep up the momentum? That will largely depend on the company’s Q4 performance.

Heading into the print, Monness 5-star analyst Brian White expects Amazon to deliver revenue of 147.3 billion, above the Street at $145.4 billion, while his EPS projection of $0.17 matches consensus expectations. White sees operating income reaching $2.28 billion. For the record, Amazon is calling for sales between $140-148 billion and operating income in the $0.0 billion to $4.0 billion range.

White’s top-line forecast factors in 7% year-over-year growth, which amounts to a “sharp deceleration” from the 15% uptick seen in 3Q22 and is lower than the 9% growth exhibited during the same period last year. Additionally, his 4Q22 revenue forecast takes into account a 16% sequential uptick, well below previous December quarters’ four-year average of up 27%.

For the seventh quarter in a row, AWS should remain Amazon’s fastest growing segment. However, while White sees revenue here climbing by 24% year-over-year to $22.08 billion, that reflects a deceleration from the 27% growth notched in 3Q22 and is also some distance short of the 40% uptick posted in the same period a year ago.

As for the 1Q23 outlook, White is calling for the “seasonally weakest quarter of the year” to generate sales of $123.3 billion (a 6% y/y increase) and EPS of $0.04. Street has $125.1 billion and $0.27, respectively.

Looking at the bigger picture, White has an apprehensive take for what’s just around the corner. “We believe Amazon is well positioned as a key beneficiary of digital transformation, however, regulatory headwinds persist, and we believe the darkest days of this downturn are ahead of us,” the analyst explained,

That does not mean the stock is about to suffer, according to White; along with a Buy rating, his $136 price target suggests the shares will climb 35% higher over the coming months. (To watch White’s track record, click here)

The Street largely seems to echo White’s positive stance, considering TipRanks analytics showcase AMZN as a Strong Buy. Out of 34 analysts polled by TipRanks in the last 3 months, 30 are bullish, while just 4 remain sidelined. At $132.65, the average target makes room for one-year returns of ~32%. (See Amazon stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More