Results: Amazon.com, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Shareholders might have noticed that Amazon.com, Inc. (NASDAQ:AMZN) filed its quarterly result this time last week. The early response was not positive, with shares down 8.4% to US$168 in the past week. It looks like a credible result overall - although revenues of US$148b were what the analysts expected, Amazon.com surprised by delivering a (statutory) profit of US$1.26 per share, an impressive 23% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Amazon.com

Taking into account the latest results, the consensus forecast from Amazon.com's 57 analysts is for revenues of US$635.6b in 2024. This reflects a reasonable 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 11% to US$4.69. In the lead-up to this report, the analysts had been modelling revenues of US$638.9b and earnings per share (EPS) of US$4.58 in 2024. So the consensus seems to have become somewhat more optimistic on Amazon.com's earnings potential following these results.

The consensus price target was unchanged at US$221, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Amazon.com, with the most bullish analyst valuing it at US$251 and the most bearish at US$180 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Amazon.com shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Amazon.com's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this to the 33 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it looks like Amazon.com is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Amazon.com following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$221, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Amazon.com analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com