Earnings Preview | Amazon's Q1 Profit Expected to Exceed Expectations, AWS Growth to Further Slow
Zacks' analyst expectations show that Amazon's first-quarter revenue is expected to be $124.77 billion, a year-on-year increase of 7%. Earnings per share are expected to be $0.25, which may exceed expectations.
Amazon will release its quarterly financial report on April 27.
Q1 Performance Expectations
Analysts surveyed by Zacks expect Amazon's Q1 revenue to be $124.77 billion, a YoY increase of 7%.
It is worth noting that Zacks expects Amazon's Q1 EPS to be $0.25, which may exceed expectations.
Analysts expect Amazon's annual EPS to rebound and soar by 90% to $1.35 per share in the 2023 fiscal year, up from $0.71 per share in 2022.
EPS for the 2024 fiscal year is expected to increase by another 61% to $2.18 per share.
Revenue is expected to grow by 8% this year and by another 12% in the 2024 fiscal year, reaching $625.41 billion.
Amazon Expectations
Analysts expect Amazon's Q1 revenue to increase by 15% YoY to $21.16 billion, lower than the 20% growth in Q4 last year and far lower than the 37% growth in the same period last year.
Amazon's profit growth in the first two quarters of this year may reach single digits.
In the most recent Q4, Amazon's Amazon revenue increased by 20% YoY to $21.4 billion.
Amazon accounted for 14% of Amazon's total revenue in Q4, up 4% from Q3's $20.5 billion in cloud revenue growth. However, this is slower than many analysts expected and a significant decline from the 27% YoY growth rate in Q3.
So far, Amazon is considered to control most of the cloud computing market, accounting for about 32%, followed by Microsoft Azure at 23% and Alphabet-C's Google Cloud at about 10%.
Performance and Valuation
Amazon's stock price is $106 per share, with an expected P/E ratio of 79.3, far below the highest level in the past 10 years and a 37% discount compared to the median of 126.5 times.
However, Amazon's stock price is still far above the industry average of 21.6 times, but it is the leader in the field and Wall Street has been willing to pay a premium for the company due to its growth and expansion.
Analysts rate Amazon as a "buy" with a target price of $136. He expects Amazon to remain the fastest-growing business unit for Amazon.
Amazon may have more room to rise this year, but this will largely depend on its quarterly performance, which shows its ability to maintain growth in cloud computing and expansion in other business areas.