Amazon Set to Report Earnings Amidst Mixed Investor Sentiment

Amazon (AMZN) closed at $189.07, up +1.36%. The upcoming earnings report on May 1, 2025, is crucial, with predicted EPS at $1.37 and revenue at $154.56 billion, both showing significant year-over-year growth. Investors anticipate changes in analyst sentiment following the report.

Date: 26-04-2025

AI Rating: 7

Earnings and Revenue Growth Expectations
Amazon is scheduled to announce its earnings on May 1, 2025, with an expected EPS of $1.37, reflecting a 21.24% growth compared to the same quarter last year. This projection could positively influence investor sentiment, as strong earnings forecasts typically signal a healthy business outlook. Additionally, the anticipated revenue of $154.56 billion indicates a growth of 7.85% year-over-year, which suggests sustained demand for Amazon's services amidst a competitive retail landscape.

Current EPS and Annual Revenue Projections
For the full year, the Zacks Consensus Estimates suggest an annual EPS of $6.26 and a revenue of $690.97 billion, indicating improvements of 13.2% and 8.31%, respectively, from the prior year. This long-term growth perspective can be appealing for investors looking for strong fundamentals.

Market Performance and Valuation
Despite a recent decline of 7.36% in the past month, Amazon's stock, priced at a Forward P/E of 29.78, remains relatively high compared to the industry average of 23.5. A higher P/E ratio implies that investors have high expectations for future growth, though it might be a caution flag if earnings growth does not materialize. Moreover, a PEG ratio of 1.34, which indicates a balanced valuation against the anticipated earnings growth rate, shows that the stock is reasonably valued compared to its peers in the Internet-Commerce sector, which has an average PEG of 1.38.

Analyst Sentiment and Zacks Rank
Currently, Amazon holds a Zacks Rank of #3 (Hold), indicating neutral sentiment among analysts. Particularly, the latest EPS estimate has decreased by 0.89%, which could suggest cautious sentiments among analysts. The analysis of estimate revisions indicates that they are closely correlated with near-term price momentum, so this slight downward revision is a point of concern.

In conclusion, while Amazon is poised to provide positive earnings news, the current economic landscape and high valuation metrics create uncertainty. Investors should weigh the growth expectations against the existing market dynamics before making investment decisions.

Stocks: AMZN