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Amazon's EPS & Revenue Growth: A Mixed Future Outlook

Amazon (AMZN) faces a crucial juncture with its stock under pressure. Current EPS projections show a 21.2% year-over-year change, but a slight revision downwards in estimates may temper investor enthusiasm.

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AI Rating:   6

**Earnings Performance Analysis**: Amazon recently reported an expected earnings per share (EPS) of $1.37 for the current quarter, reflecting a significant year-over-year change of +21.2%. However, the Zacks Consensus Estimate has seen a minor downward change of -0.8% over the past month. This slight decrease is a concern as it may indicate weakening investor sentiment. For the fiscal year, the consensus earnings estimate stands at $6.25, signifying a growth of +13% year-over-year with a recent adjustment of -1.1%. This declining trend in earnings estimate revisions could lead to lower investor confidence and may put downward pressure on the stock price.

**Revenue Growth Insight**: Revenue growth remains critical for maintaining earnings levels. Amazon's consensus sales estimates for the current quarter point towards $154.64 billion, with a year-over-year increase of +7.9%. Looking ahead, estimates for the current and next fiscal years are $694.54 billion and $763.21 billion respectively, which represents growth rates of +8.9% and +9.9%. The last reported quarter revealed revenues of $187.79 billion, indicating a +10.5% change year-over-year and a positive revenue surprise of +0.28%. Such results indicate a solid foundation for generating future revenues despite lower-than-expected earnings revisions.

**Valuation and Market Sentiment**: Currently, Amazon has a Zacks Rank #3 (Hold), indicating it is expected to perform in line with the broader market. However, its Value Style Score of D suggests that the stock is somewhat overvalued relative to its peers, which could deter potential investors looking for undervalued opportunities. Given the combination of strong historical revenue performance and the recent decline in EPS estimates, the overall sentiment surrounding Amazon might affect short-term investment decisions.

In conclusion, despite solid revenue growth, the downward revisions in earnings estimates could weigh on Amazon's performance in the next few months. Investors should carefully consider these factors when evaluating entry points or holding strategies.

Stocks:  AMZN