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

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 performance in the third quarter. It should be noted that investors can use TipRanks' website traffic tool to gain insight into a company's upcoming earnings report. The tool provides information about how a company's website domain has performed over a period of time.

For AMZN, TipRanks' traffic screener shows a sequential increase in visits but a year-over-year decline in the third quarter. Notably, visits to amazon.com fell 0.84% ​​compared to last year's third quarter, possibly reflecting the impact of economic uncertainty and increasing competition from companies such as Microsoft (MSFT) and Alphabet (GOOGL) in the cloud sector is attributable.

Key insights 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 increasing demand for AI-powered cloud solutions is increasing confidence in AWS and making the stock more attractive. In contrast, pessimistic analysts emphasize challenges such as escalating competition, rising labor costs and ongoing regulatory hurdles that could negatively impact Amazon's performance.

Still, if Amazon can maintain robust growth in its AWS segment while continuing to improve margins, the company could report strong Q3 results and potentially push its stock price to new highs.

AMZN's share price is rising despite competitive pressures

Amazon's stock price has seen steady growth, even in the face of increasing competition in the retail and cloud sectors. The stock is up approximately 44% over the past year and 25% year-to-date, largely driven by effective cost-cutting initiatives and streamlined operations. Additionally, the company's focus on its cloud segment, particularly Amazon Web Services (AWS), has significantly strengthened its profitability.

Options traders are expecting 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 development is determined by calculating the “at-the-money” straddles of the options that are closest to expiry after the earnings announcement. If that sounds complicated, don't worry, the Options tool will do it for you.

In fact, it is currently said that options traders are expecting a 6.68% move in either direction.

Is Amazon a buy or sell right now?

As for Wall Street, Amazon stock has a consensus rating of Strong Buy. Of the 48 analysts covering the stock, 46 have a buy recommendation and two have a hold recommendation. Additionally, the average AMZN price target of $224.14 implies an upside potential of 17.46%.

See more AMZN analyst ratings

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