Amazon (AMZN) stock has been absolutely crushing it in 2015. After a lackluster 2014 that was defined by a disappointing series of earnings misses, shares of the e-tailing giant are up 56% this year. The main catalysts? The last two Amazon earnings reports, which have blown expectations out of the water.
The question on everyone’s mind is whether Amazon earnings can yet again shock Wall Street when the company reports after the bell on Thursday, July 23.
Let’s take a look at what analysts expect from the company and what the main drivers of AMZN stock will be in the most recent quarter.
AWS, Amazon Prime Day
Amazon caught two big upgrades this week ahead of its earnings report; Wedbush hiked its AMZN stock price target to $575 from $435 while Cowen raised its price target from $435 to $575. Both firms upgraded Amazon stock from the equivalent of a “hold” to a “buy” rating.
True to form, Wall Street analysts do a fine job of telling you where a stock has just been … it’s the predictive part they’re still trying to nail down.
Wedbush, for its part, thinks that Amazon Web Services, or AWS, will play a starring role in second-quarter results, with outsized margins in Amazon’s cloud computing division offsetting the ascetic margins in its core business. Still, analysts expect AMZN stock to lose 14 cents per share in the quarter on $22.38 billion in revenue. That compares to a 27-cent loss on $19.34 billion in revenue a year ago.
Even though consensus estimates are calling for negative Amazon earnings per share, there’s a high likelihood AMZN will trump revenue estimates. The reason? Three simple words: Amazon Prime Day.
Amazon Prime Day was an online shopping holiday abruptly invented by AMZN on July 6 and held on July 15. Amazon vowed that the event would have “more deals than Black Friday.”
Even though it totally copped Alibaba‘s (BABA) Singles’ Day swagger, there’s no doubt many of the consensus revenue estimates don’t reflect the outsized effect of Amazon’s impromptu one-day sales extravaganza.
A company press release detailed the highlights of Amazon Prime Day, listing a number of impressive stats about the holiday. Here are some of the best figures, taken directly from the press release:
- Amazon sold more units on Prime Day than Black Friday 2014, the biggest Black Friday ever
- Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014
- More new members tried Prime worldwide than any single day in Amazon history
- Sellers on Amazon that use the Fulfillment by Amazon service enjoyed record-breaking unit sales — growing nearly 300%
- Customers ordered hundreds of thousands of Amazon devices — making it the largest device sales day ever worldwide
All in all, sounds like a good day to me. Today’s e-commerce space is crowded and growing — aside from BABA and eBay (EBAY), Amazon now has the likes of Etsy (ETSY) and even Google (GOOG, GOOGL) and Facebook (FB) to compete with. But Amazon is still first-tier.
Hopefully for investors, Amazon earnings decisively show its dominance.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at email@example.com.
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