Amazon Stock Poised for Second Monthly Gain as Q3 Earnings Loom
Amazon Stock Poised for Second Monthly Gain as Q3 Earnings Loom
Will the stock reach a new all-time high on earnings?
- Amazon is set to report third-quarter results on Thursday.
- Analysts expect the company to announce earnings of $1.14 per share on $157.25 billion in revenue.
- Its stock is on track to record a second monthly gain as the month draws to a close.
Amazon (AMZN) is set to report fiscal third-quarter earnings on Thursday, before the market open.
The stock price is on track for a second straight monthly gain in October, as the Nasdaq reaches a monthly high.
But despite rising in September and October, Amazon remains about 6% off its all-time high hit back in July at 201.20.
Still, a beat on earnings may help to propel the stock price back to and potentially above the July swing high.
What do analysts expect from Amazon’s earnings?
Analysts expect Amazon to report earnings per share (EPS) of $1.14 on $157.25 billion in revenue, according to TradingView,. That would be up from $0.94 per share and revenue of $143.08 billion a year ago. Last quarter, Amazon reported earnings of $1.26 per share and revenue of $148 billion.
Amazon Web Services (AWS) saw solid growth last quarter, which contributed to a large expansion in the company’s operating income that clocked in at nearly $15 billion—up nearly double from $7.7 billion in Q2’23. AWS segment sales grew 19% year-over-year, according to its second-quarter results.
Investors will want to see continued growth from the AWS segment, considering the amount of money the e-commerce giant has been spending. The main competitor in that business is Microsoft (MSFT), with its Azure cloud platform.
A weak point could be its Kuiper satellite internet business, which hasn’t been well received by analysts. The project has required enormous capital expenditures, triggering fear it could hit the margin expansion for Amazon.
Meanwhile, Amazon’s e-commerce business will also be under the microscope. The regional model has pushed for faster delivery in the hope it will mean consumers make more purchases. Online shop sales grew last quarter to $55.4 billion, but Amazon faces growing competition from companies like privately held Shein.
Trading AMZN on earnings
Amazon traded with an implied volatility rank (IVR) of 62.6 as of today. That suggests volatility is elevated compared to the previous twelve months. The Nov. 1 options expiration shows an implied move of +/- 11.69 points, or 6.2% of today’s stock price. An iron condor with the short strikes at 182.5 and 195 and the longs at 180 and 197 gives a probability of profit of 38% and a max loss and max profit of $170 and $180 respectively.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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