Amazon.com, Inc. (Nasdaq: AMZN) expectations are high ahead of the company’s second-quarter earnings report expected out June 26. Analysts are expecting a strong quarter from Amazon and see plenty more long-term upside for the stock.
Wall Street analysts are expecting Amazon to report second-quarter earnings per share of $2.50. Analysts are also expecting $53.38 billion in revenue, up 40.6 percent from a year ago.
While those targets may seem like a high bar to clear, Wedbush analyst Michael Pachter is expecting even better numbers from Amazon. Pacter is calling for EPS of $2.96 and revenue of $53.38 billion. Wedbush is also forecasting $59.44 billion in third-quarter revenue, above consensus guidance estimates of $58.02 billion.
“We estimate that Prime Day sales were up by at least 33 percent to $4.2 billion, although the actual figure may have been much higher,” he says.
KeyBanc analyst Edward Yruma says integrating Amazon Prime into Whole Foods was likely a key revenue driver in the second quarter.
“Key First Look Data is supportive to our above-consensus revenue view, and we think that increased price investments at [Whole Foods] helped,” Yruma says.
Yruma says the key commentary for investors to watch on Thursday will be anything related to Prime Day or Amazon’s advertising business. At this point, KeyBanc estimates Amazon’s advertising business has grown to an annualized run rate of nearly $9 billion in revenue, and Yruma says AWS cloud revenue should double to $42 billion by 2020.
KeyBanc is also expecting second-quarter EPS and revenue beats of $2.61 and $53.49 billion, respectively.
Even some analysts predicting a revenue miss from Amazon are hedging their bets. Canaccord Genuity analyst Michael Graham expects Amazon’s second-quarter revenue growth to decelerate sequentially for the first time in five quarters, dropping 4.5 points to 38 percent. However, Graham says his outlook may be conservative and sees Amazonand Facebook (FB) as the top FANG stocks for long-term investors to own.
“We continue to see Amazon as having the most robust and durable growth outlook in the group,” he says.
Canaccord Genuity has a “buy” rating and $2,000 price target for Amazon. Wedbush has an “outperform” rating and $1,800 target for AMZN stock. KeyBanc has a “sector weight” rating for Amazon.