Amazon.com Earnings Preview

When? After Market Close Thursday, Oct 27 Can Amazon live up to high expectations? That’s the big question for this report as with many others. Last time around, Amazon totally delivered, posting EPS of $2.80 way above the $2.42 the street had been expecting. Since then, the shares have gained over 11% to trade near $840.00. Amazon currently trades at over 100 times forward earnings expectations and 200 times trailing earnings. This quarter, the street is expecting EPS of $2.06 down from the prior quarter but up 57% over year on sales of $32.6B which would be up 28% over year and up from $30.4B last quarter. Based on this, Amazon may need to deliver a positive surprise to justify its high valuation, and a miss could be punished severely. Amazon.com has been trading between $800 and $850 in recent weeks. An in-line report could keep it within this range while a surprise could drive a break out of this channel with the direction depending on whether the potential surprise is positive or negative. Any comments or guidance related to Black Friday, Cyber Monday or the upcoming holiday selling season could also move the stock.

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