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Amazon Earnings Preview: Will AWS Drive Growth Again?
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Shares of Amazon (AMZN - Free Report) dropped about 1% in morning trading Thursday, just hours before the e-commerce behemoth is scheduled to release its quarterly earnings results. Amazon’s report has the potential to set the tone for several key industries early in 2018, so investors should be sure to pay close attention to the company’s latest numbers this afternoon.
Based on our latest consensus estimates, we expect Amazon to report adjusted earnings of $1.85 per share and total revenues of $59.99 billion. These results would represent respective growth rates of 20% and 37%, which is not too shabby for one of the world’s most valuable companies.
Amazon has its hands in nearly every emerging tech and retail trend right now, so we can be confident that its report will be carefully dissected. The Jeff Bezos-led firm is notoriously tight-lipped with certain key details, but investors will likely devour any updates on Amazon’s Whole Foods, entertainment, and hardware divisions—and rightfully so.
Amazon has poured some serious cash into these budding businesses over the past few years, including nearly $14 billion for Whole Foods and an undisclosed amount towards fleshing out its original content offerings. Meanwhile, its e-commerce business continues to grow, and consumers are starting to become more familiar with its hardware products—like the Echo smart speaker.
But for all of these points of interest, no division will impact Amazon’s earnings report quite like Amazon Web Services (AWS).
AWS is a collection of enterprise-level platforms designed for websites and companies that can’t afford the time or money it takes to develop their own server farms. In other words, AWS provides cloud-based storage and templates for companies to quickly boost their computing capabilities.
Launched a decade ago, AWS has really exploded in popularity over the past few years. The service now has millions of customers, and it is a primary driver of profit for the e-commerce giant.
So what can investors expect from AWS this quarter? To answer this question, we can turn to our exclusive non-financial metrics consensus estimate file.
The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
Our consensus estimate file is calling for Amazon to report total AWS revenues of $4.980 billion, which would represent year-over-year growth of 41%. In the previous quarter, Amazon narrowly surpassed our AWS revenue estimate of $4.537 billion, reporting totals of $4.584 billion and expanding about42% year-over-year.
While there will certainly be other factors at play, investors should look at for AWS as the catalyst for Amazon’s post-earnings momentum. If the company post better-than-expected numbers here again, the stock could be ready to move higher.
Want more analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Amazon Earnings Preview: Will AWS Drive Growth Again?
Shares of Amazon (AMZN - Free Report) dropped about 1% in morning trading Thursday, just hours before the e-commerce behemoth is scheduled to release its quarterly earnings results. Amazon’s report has the potential to set the tone for several key industries early in 2018, so investors should be sure to pay close attention to the company’s latest numbers this afternoon.
Based on our latest consensus estimates, we expect Amazon to report adjusted earnings of $1.85 per share and total revenues of $59.99 billion. These results would represent respective growth rates of 20% and 37%, which is not too shabby for one of the world’s most valuable companies.
Amazon has its hands in nearly every emerging tech and retail trend right now, so we can be confident that its report will be carefully dissected. The Jeff Bezos-led firm is notoriously tight-lipped with certain key details, but investors will likely devour any updates on Amazon’s Whole Foods, entertainment, and hardware divisions—and rightfully so.
Amazon has poured some serious cash into these budding businesses over the past few years, including nearly $14 billion for Whole Foods and an undisclosed amount towards fleshing out its original content offerings. Meanwhile, its e-commerce business continues to grow, and consumers are starting to become more familiar with its hardware products—like the Echo smart speaker.
But for all of these points of interest, no division will impact Amazon’s earnings report quite like Amazon Web Services (AWS).
AWS is a collection of enterprise-level platforms designed for websites and companies that can’t afford the time or money it takes to develop their own server farms. In other words, AWS provides cloud-based storage and templates for companies to quickly boost their computing capabilities.
Launched a decade ago, AWS has really exploded in popularity over the past few years. The service now has millions of customers, and it is a primary driver of profit for the e-commerce giant.
So what can investors expect from AWS this quarter? To answer this question, we can turn to our exclusive non-financial metrics consensus estimate file.
The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
Our consensus estimate file is calling for Amazon to report total AWS revenues of $4.980 billion, which would represent year-over-year growth of 41%. In the previous quarter, Amazon narrowly surpassed our AWS revenue estimate of $4.537 billion, reporting totals of $4.584 billion and expanding about42% year-over-year.
While there will certainly be other factors at play, investors should look at for AWS as the catalyst for Amazon’s post-earnings momentum. If the company post better-than-expected numbers here again, the stock could be ready to move higher.
Want more analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>