Amazon Q1 Earnings Preview: Will AMZN Return to All-Time Highs?
Amazon Q1 Earnings Preview: Will AMZN Return to All-Time Highs?
Investors expect to see the e-commerce behemoth deliver another round of improved profits and revenue
- Amazon is set to report earnings on Tuesday, April 30.
- Investors see EPS at $0.84 and revenue at $142.6 billion.
- AWS continued double-digit growth key to keeping investors happy.
Amazon (AMZN) is scheduled to report fiscal first-quarter earnings on Tuesday, April 30, 2024, after the closing bell.
The e-commerce giant has delivered upside surprises in four of the last five quarters for earnings per share (EPS) and in all the last five quarters for revenue. And investors expect to see Amazon deliver another round of improved profits and revenue.
The market sees Amazon’s EPS coming in at $0.84 and revenue at $142.6 billion. In February, Amazon predicted Q1 sales of between $138 billion and $143.5 billion. That would mark a decrease from the prior quarter’s EPS of $1.00 and revenue of $169.96 billion. Compared to Q12023, however, EPS would rise from $0.31, and revenue would increase from $127.36 billion.
Given that much of Amazon’s business depends on seasonal factors, comparing it to the previous year’s Q1 period offers a fairer comparison to evaluate the company’s financial performance, especially when it comes to retail—the company’s largest segment. 2023 Q1’s North America sales came in at $76.9 billion last year.
AWS results will be important
Investors are keen, as always, to hear about Amazon Web Services (AWS), which has been posting low double-digit gains in previous quarters and remains one of the company’s most-watched growth drivers. The consensus for AWS growth is 15%, which would be above the prior quarter’s 13% growth. Meeting or beating that number would go a long way toward impressing investors.
Other areas that are in focus are the company’s advertising business, with growth in the segment expected to post a healthy 23% increase. That would leave it as the fastest-growing segment in the company. Advertising could also get a boost from its recent hit show Fallout, although the show premiered past the quarter-end date. Amazon quickly renewed the show for a second season following its success as one of the most watched shows to launch on the platform.
Trading Amazon earnings
Amazon is trading with an implied volatility rank (IVR) of 70.0 as of Thursday, April 25. The stock is about 9% off its recent all-time high of 189.77 set in early April.
The recent decline isn’t specific to Amazon itself but instead the broader market. That said, an optimistic outlook on earnings could see the stock recover back near those highs if numbers impress. The May 3 strike shows an implied move of +/- 12.91 points.
That would put a move within the recent all-time high to the upside and nearly 160 to the downside. An iron condor with the short strikes at 160 and 190 for the May 3 expiration would give a probability of profit (POP) of 62% with a max profit of 90 and max loss of 161.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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