Cathy Wood Loads Amazon Stock Ahead of Earnings – TipRanks.com

It's almost time for Amazon (NASDAQ:AMZN) To report 3Q24 earnings, the ecommerce giant will release its latest financial statements when market activity closes on Thursday (October 31).

Following a mixed Q2 that saw Amazon's share price decline, investors are now looking to see if the company can deliver more favorable results this time around. While the results are still up in the air, at least one prominent market picture seems optimistic as the release approaches.

Ark Invest CEO Kathy Wood has been busy loading up on AMZN stock in October, purchasing 238,892 shares through her ARKK, ARKQ and ARKW ETFs. That casting is currently worth about $46 million.

Wood isn't the only one showing confidence in Amazon moving forward. Mark Mahaney of Evercore, an analyst ranked in the top 1% of Street stock experts, has many good things to say about the company.

“Amazon remains our top large cap long with a 12-month horizon, as we believe AWS is recovering to sustainable, premium revenue growth (20%), Amazon's retail segment should be a significant share gainer, core retail operating margins should continue . If expanded nicely, Amazon's ad revenue could hit a positive inflection point for APV, and AMZN will benefit from ongoing mix shifts to higher margins, higher growth cloud and ad revenue,” opined Mahaney.

As for what to expect from the numbers, Mahaney positions his estimates for $157 billion in revenue, $14.8 billion (a 9.4% margin), and GAAP EPS of $1.26 — toward the high end of Amazon's guidance range of $154 to $158.5. billion in revenue and $11.5 to $15 billion in operating income. Those figures closely aligned with Wall Street estimates of $157.2 billion in revenue, $14.7 billion in operating income, and $1.14 in EPS.

Fourth-quarter revenue rose 18% sequentially to consensus expectations, which Mahaney said is commendable, though “not conservative.”

Where Mahaney and the Street differ is in Q4 operating income, with the consensus at ~$17.5 billion but Mahaney about $1 billion below, forecast at $16.6 billion. “We believe this Q4 OI risk is well-framed among investors,” said the analyst, “but the Street number still looks inherently aggressive, with or without factoring in Kuiper launch costs.”

Still, Mahaney sees “no structural issues” there and still expects a strong expansion for operating margins of more than 100bps, even when Kuiper operating costs are factored in at $300 million.

All told, Mahaney rates AMZN shares an Outperform (i.e., Buy), with a $240 price target, implying a 24.5% upside for the stock from current levels. (To see Mahani's track record, click here)

The Street's average price target is a bit more modest, but $224.14 still suggests shares have room to grow ~16% over the next year. Based on a lopsided mix of 46 buys vs 2 holds, the analyst consensus rates the stock a strong buy. (See Amazon stock forecast)

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Disclaimer: The views expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.