Amazon: Holiday Season Record Sales To Drive Q4 Consensus Higher

Summary:

  • Amazon’s 3Q FY2024 earnings report indicated an improvement in retail sales but provided a muted 4Q revenue outlook, factoring in unfavorable currency headwinds.
  • Last week, the company saw the strongest holiday season sales in years, driven by early promotions before Thanksgiving and same-day delivery services.
  • I anticipate strong sales extending into the Christmas and New Year holiday season, which should further boost 4Q revenue estimates.
  • AWS’ growth momentum remains robust, with sequential growth acceleration and margin expansion in 3Q, supported by elevated capital investments in GenAI infrastructure.
  • Despite the recent rally, the stock still appears cheap relative to its earnings growth history, currently trading at 0.34x PEG GAAP TTM.

Amazon fulfillment center building in Las Vegas

4kodiak/iStock Unreleased via Getty Images

What Happened

Amazon (NASDAQ:AMZN) rallied more than 20% since the 3Q FY2024 earnings report. I believe the recent rally reflects improvements in the company’s revenue consensus in 4Q, and I think the stock still has upside


Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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