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Amazon (AMZN - Free Report) fell prey to October’s equity market rout yesterday, declining by 5.9% by the end of trading. It has suffered a torrid month, declining 15.6% since the beginning of October. However, recent reverses are unlikely to erase the stock’s record surge of more than 70% in the past year.
With an $815 billion market cap and a stranglehold on online retail, it would be difficult to ignore Amazon as it prepares to report third-quarter numbers after the market’s close on Oct 25.
Prime Services Boosting Prospects
Amazon’s key differentiator in the online retail space is its Prime service. Rapid global expansion and the rollout of grocery services will likely help Prime deliver robust results this time around. The Zacks Consensus Estimate for subscription services sales for the third quarter is $3.6 billion, higher than last quarter’s figure of $3.4 billion. (Read: Sturdy Prime to Aid Amazon's Growth in Q3 Earnings)
Besides early peeks at sales and free delivery, the Prime services also offers subscribers access to a substantial online content. In order to take on competitors like Netflix (NFLX - Free Report) , Amazon Prime has been focusing on original content. Amazon is estimated to have spent $4 billion on content last year, which is expected to increase this year.
AWS Dominates Cloud Space
Currently, Amazon’s cloud computing division Amazon Web Services (AWS) is dominating this space. A fresh report from Synergy Research reveals that AWS has garnered 34% market share in the current quarter, a 1% improvement from the last quarter. Despite fierce competition, it is still head and shoulders above the likes of Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
Great strides are expected from AWS as far as third-quarter numbers are concerned. The Zacks Consensus Estimate for AWS revenues in the to-be-reported quarter is pegged at $6.7 billion, which would be a significant improvement over last quarter’s $6.1 billion. (Read: Amazon's AWS Momentum to Drive Growth in Q3 Earnings)
Brick & Mortar Offers Growth Avenues
The most-refreshing aspect about Amazon is that despite being an e-commerce giant, it is constantly looking at new avenues for growth. At a time when the likes of Walmart (WMT - Free Report) and Target (TGT - Free Report) are looking to bolster their online presence, Amazon is looking to venture into the brick and mortar space.
Aside from its cutting-edge, cashier-free Amazon Go grocery stores, one of which has just opened in San Francisco, the e-commerce giant is also focusing on its Amazon 4-star retail stores. Amazon reported physical stores sales of $4.31 billion last quarter, which accounted for about 8% of total Q2 revenues.
Earnings Beat on the Cards
Amazon, a Zacks Rank #3 (Hold) company, currently has an Earnings ESP of +2.32%. This is Zacks’ proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon is widely expected to report earnings per share of $3.29 for the third quarter, substantially higher than the reported earnings of 52 cents a year ago. The company’s current-year earnings are expected to rise more than 100%, way higher than the industry’s rise of 14.6%. The Zacks Consensus Estimate for earnings has increased by 2.3% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Amazon Looks Good Ahead of Q3 Earnings
Amazon (AMZN - Free Report) fell prey to October’s equity market rout yesterday, declining by 5.9% by the end of trading. It has suffered a torrid month, declining 15.6% since the beginning of October. However, recent reverses are unlikely to erase the stock’s record surge of more than 70% in the past year.
With an $815 billion market cap and a stranglehold on online retail, it would be difficult to ignore Amazon as it prepares to report third-quarter numbers after the market’s close on Oct 25.
Prime Services Boosting Prospects
Amazon’s key differentiator in the online retail space is its Prime service. Rapid global expansion and the rollout of grocery services will likely help Prime deliver robust results this time around. The Zacks Consensus Estimate for subscription services sales for the third quarter is $3.6 billion, higher than last quarter’s figure of $3.4 billion. (Read: Sturdy Prime to Aid Amazon's Growth in Q3 Earnings)
Besides early peeks at sales and free delivery, the Prime services also offers subscribers access to a substantial online content. In order to take on competitors like Netflix (NFLX - Free Report) , Amazon Prime has been focusing on original content. Amazon is estimated to have spent $4 billion on content last year, which is expected to increase this year.
AWS Dominates Cloud Space
Currently, Amazon’s cloud computing division Amazon Web Services (AWS) is dominating this space. A fresh report from Synergy Research reveals that AWS has garnered 34% market share in the current quarter, a 1% improvement from the last quarter. Despite fierce competition, it is still head and shoulders above the likes of Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
Great strides are expected from AWS as far as third-quarter numbers are concerned. The Zacks Consensus Estimate for AWS revenues in the to-be-reported quarter is pegged at $6.7 billion, which would be a significant improvement over last quarter’s $6.1 billion. (Read: Amazon's AWS Momentum to Drive Growth in Q3 Earnings)
Brick & Mortar Offers Growth Avenues
The most-refreshing aspect about Amazon is that despite being an e-commerce giant, it is constantly looking at new avenues for growth. At a time when the likes of Walmart (WMT - Free Report) and Target (TGT - Free Report) are looking to bolster their online presence, Amazon is looking to venture into the brick and mortar space.
Aside from its cutting-edge, cashier-free Amazon Go grocery stores, one of which has just opened in San Francisco, the e-commerce giant is also focusing on its Amazon 4-star retail stores. Amazon reported physical stores sales of $4.31 billion last quarter, which accounted for about 8% of total Q2 revenues.
Earnings Beat on the Cards
Amazon, a Zacks Rank #3 (Hold) company, currently has an Earnings ESP of +2.32%. This is Zacks’ proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. Price and EPS Surprise | Amazon.com, Inc. Quote
Amazon is widely expected to report earnings per share of $3.29 for the third quarter, substantially higher than the reported earnings of 52 cents a year ago. The company’s current-year earnings are expected to rise more than 100%, way higher than the industry’s rise of 14.6%. The Zacks Consensus Estimate for earnings has increased by 2.3% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>