Amazon (AMZN) Q3 Pre-Earnings: Analysts Forecast 21% Earnings Growth

On By Littum

Tech giant Amazon (AMZN) is set to announce its financial results for the third quarter of 2024 on October 31. Wall Street analysts expect robust earnings with expectations of $1.14 per share, reflecting a 21% increase from the same quarter last year. Additionally, revenue is expected to hit $157 billion, up 10% year-over-year, according to data from TipRank’s Forecast site.

Here’s what Amazon’s third-quarter traffic data reveals

Although analysts expect Amazon’s revenue to rise compared to the same quarter last year, the company’s website traffic data suggests a less robust Q3 performance. It should be noted that investors can use TipRanks’ Website Traffic Tool to gain insight into a company’s upcoming earnings report. The tool offers information on how a company’s website domain performed over a specific time frame.

For AMZN, TipRanks’ traffic screener shows a sequential increase in visits, but a year-over-year decline in Q3. Specifically, visits to amazon.com were down 0.84% ​​compared to Q3 last year, potentially reflecting the impact of economic uncertainty and increasing competition from companies such as Microsoft ( MSFT ) and Alphabet ( GOOGL ) in the cloud sector.

Highlights from TipRanks’ Bulls & Bears Tool

According to TipRanks’ Bulls Say, Bears Say tool, bullish analysts believe Amazon’s profit margins are improving, driven by strong growth in both advertising and cloud services. They argue that the growing demand for AI-powered cloud solutions is increasing confidence in AWS, making the stock more attractive. In contrast, bearish analysts highlight challenges such as escalating competition, rising labor costs and ongoing regulatory hurdles that could negatively impact Amazon’s performance.

Nevertheless, if Amazon can maintain robust growth in its AWS segment while continuing to improve margins, it could report strong Q3 results, potentially pushing its share price to new highs.

AMZN’s stock price rises despite competitive pressure

Amazon’s share price has shown steady growth, even amid increasing competition in the retail and cloud sectors. The stock is up approximately 44% over the past year and 25% year-to-date, primarily driven by effective cost-cutting initiatives and streamlined operations. In addition, the company’s focus on its cloud segment, particularly Amazon Web Services (AWS), has particularly strengthened its profitability.

Options traders expect a big move

Using TipRanks’ Options tool, we can see what options traders expect from the stock immediately after the earnings report. The expected earnings move is determined by calculating the “at-the-money straddle” of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Preferences tool does this for you.

In fact, it currently says options traders expect a 6.68% move in either direction.

Is Amazon a buy or sell right now?

As for Wall Street, Amazon stock has a strong buy consensus rating. Of the 48 analysts covering the stock, 46 have a Buy recommendation and two have a Hold recommendation. Furthermore, at $224.14, the average AMZN price target implies 17.46% upside potential.

See more AMZN analyst ratings

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