(AMZN) Q4 2023 Earnings Preview

Amazon com AMZN Q4 2023 Earnings Preview, Inc. (NASDAQ: AMZN) will report Q4 2023 results on Thursday, February 1, 2024. Here are the key numbers that we’re watching.

Figure 1: Amazon – consensus expectations for Q4, past earnings surprises, revisions, and CAGR

Amazon com Earnings Preview

Source: Visible Alpha consensus (January 26, 2024). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Amazon Q4 2023 Earnings Preview

According to Visible Alpha consensus, total revenues expected for Q4 have come up slightly from the beginning of last year, from $163 billion to $166 billion, driven by strength in Amazon’s online retail and advertising businesses, while AWS expectations have come down. The focus will likely be on the Q4 performance and 2024 outlook for the online retail and AWS margins and their impact on EPS.

The North America retail operating margin has increased significantly from a meager 1.1% at the beginning of last year to 4.3% now, ahead of Q4 earnings. Operating margin expectations for North America have remained at current levels since October. For 2024, the estimated margin ranges from 3.6% to 6.3%, with consensus at 5.1%. What will the company say about the outlook for the online business?

AWS margin came in at 30% last quarter, and has steadily increased back to the expected 28% level forecast at the beginning of last year for Q4 and 2024. There is, however, a significant range of estimates for the Q4 AWS margin into this week’s release, with analysts expecting from 24% to 31%.

The stock has traded up over 30% since last quarter’s October release, outperforming the S&P 500. Could the Q4 release provide the next positive catalyst for the stock?

Figure 2: Amazon consensus estimates

Amazon com Consensus Estimates

Source: Visible Alpha consensus (January 26, 2024). Stock price data courtesy of FactSet. AMZN’s current stock price is as of the market close on January 25, 2024.

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About Melissa Otto, CFA

Melissa is Head of TMT Research at Visible Alpha. She spent 20+ years as an equity analyst and portfolio manager. At TIAA/Nuveen, Melissa specialized in covering global technology and consumer stocks and the Pan-Asia region. She also managed one of Fidelity's equity research teams as a director of research. In addition to her equity investing career, Melissa worked directly with software engineering teams at Bloomberg, Microsoft, and MSCI building cloud-based solutions to centralize and aggregate critical investment data for investors. Melissa studied Japanese at Harvard University, received her MA in economics from Brandeis University and MS degree from the University of Pennsylvania, and is a CFA charterholder. She is certified in Azure Fundamentals and Agile Project Management.

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