Amazon earnings live updates: Wall Street watching for margins, signs of consumer health

CFRA analyst Arun Sundaram is cautious about Amazon's near-term trajectory, even if the company has compelling prospects over the long run.

The firm expects Amazon to notch a "modest" earnings beat after the bell: it predicts revenue to rise 10.5% year-over-year and GAAP operating profit to climb 36%.

While AWS and advertising momentum work in Amazon's favor, Sundaram will monitor how the firm's other investments affect profits.

Though growth in other parts of Amazon's business should cover these investments, CFRA expects profits to expand more moderately into 2025.

CFRA also cited that Amazon is experiencing a tepid spending environment as consumers shift to lower-priced products.

The company trimmed its Amazon price target to $219 a share on October 21, indicating 17% upside ahead.

JPMorgan highlighted Amazon Web Services, the firm's cloud computing system, as a chief reason to stay bullish on the stock.

AWS will continue accelerating through 2025, aided by optimizations, new workload migrations, and Amazon's growing monetization of artificial intelligence. The bank predicts AWS grew 21% year over year, surpassing Wall Street expectations.

JPMorgan expects third-quarter net sales to reach $157 billion, falling under consensus estimates of $157.3 billion.

Retail profits were likely pressured in the last quarter amid spending headwinds, including Prime Day discounts. According to the bank, consumers have turned cautious on discretionary items, while indicating a preference for deals. Together, these factors have depressed Amazon's average selling prices.

JPMorgan has an "overweight" rating on Amazon and a $230 price target. This suggests nearly 23% upside from current levels.

3rd quarter

• Net sales estimate: $157.29 billion

  • Online stores net sales estimate: $59.64 billion
  • Physical Stores net sales estimate: $5.17 billion
  • Third-Party Seller Services net sales estimate: $38.22 billion
  • Subscription Services net sales estimate: $11.17 billion
  • AWS net sales estimate: $27.49 billion
  • North America net sales estimate: $95.22 billion
  • International net sales estimate: $34.55 billion
• Third-party seller services net sales excluding F/X estimate: +11.8%
• Subscription services net sales excluding F/X estimate: +9.86%
• Amazon Web Services net sales excluding F/X estimate: +19.2%
• EPS estimate: $1.16

• Operating income estimate: $14.75 billion

  • Operating margin estimate: 9.34%
  • North America operating margin estimate: +5.58%
  • International operating margin estimate: 1.23%
• Fulfillment expense estimate: $24.35 billion
• Seller unit mix estimate: 60.8%

4th quarter

• Net sales estimate: $186.36 billion
• Operating income estimate: $17.49 billion