Investor sentiment has remained high for Amazon (AMZN Quick QuoteAMZN - Free Report)  stock since the company’s announcement of a record holiday season in terms of both sales and items sold.

Amazon is still the most prosperous e-commerce enterprise with an edge over eBay (EBAY Quick QuoteEBAY - Free Report)  and even indirect global competitors Alibaba (BABA Quick QuoteBABA - Free Report)  and JD.com (JD Quick QuoteJD - Free Report) . Furthermore, Amazon Web Services (AWS) remains the leading cloud provider ahead of Microsoft (MSFT Quick QuoteMSFT - Free Report)  Azure. 

Gaining momentum in recent months, let’s see if it's time to buy Amazon stock for more upside as its Q4 results approach after-market hours on Thursday, February 6.

Image Source: Zacks Investment Research

Amazon’s Q4 Expectations

Based on Zacks estimates, Amazon’s Q4 sales are thought to have increased 10% to $187.28 billion compared to $169.96 billion a year ago. Notably, AWS sales are expected to increase 19% to $28.83 billion versus $24.2 billion in the comparative quarter.

On the bottom line, Q4 EPS is projected to soar 50% to $1.52 from $1.01 a share in the prior period. More intriguing, the Zacks ESP (Expected Surprise Prediction) indicates Amazon could surpass earnings expectations with the Most Accurate Estimate having Q4 EPS at $1.59 and nearly 5% above the Zacks Consensus.

Image Source: Zacks Investment Research

The tech giant has exceeded earnings expectations for eight consecutive quarters with a very impressive average EPS surprise of 25.85% in its last four quarterly reports.

Image Source: Zacks Investment Research

Full-Year Expectations

Amazon is slated to round out fiscal 2024 with total sales expanding 11% to $637.43 billion. Even better, annual earnings are slotted to climb 79% to $5.20 per share from EPS of $2.90 in 2023.

Tracking Amazon’s Valuation

Trading around $240, AMZN is at a 38X forward earnings multiple which isn't an overly stretched premium to the benchmark S&P 500 and is near Microsoft’s 31.5X.

Also encouraging to long-term investors is that AMZN trades well below its five-year high of 161.3X forward earnings and offers a steep discount to the median of 66X during this period.

Image Source: Zacks Investment Research

Bottom Line

Ahead of its Q4 report, Amazon stock sports a Zacks Rank #2 (Buy). To that point, the Zacks ESP does suggest Amazon could report strong Q4 results on the heels of its record holiday shopping season.

Plus, the rally in AMZN may certainly continue if this is accompanied by favorable guidance with Zacks projections calling for another year of double-digit top and bottom line growth in FY25.