KeyBanc Projects 'Happy, Healthy' Holiday Numbers In Amazon's Q4 Report

Amazon.com, Inc. (NASDAQ: AMZN) is scheduled to report its fourth-quarter results after Thursday's market close. The numbers will be closely watched by Wall Street analysts, as they include the 2017 holiday shopping season.

The Analyst

KeyBanc Capital Markets' Edward Yruma maintains a Sector Weight rating on Amazon's stock with no assigned price target.

The Thesis

Amazon is expected to show in its earnings report Thursday that it had a "happy and healthy" holiday season and likely gained market share as part of an overall consumer shift toward online shopping, Yruma said in a note. (See the analyst's track record here.)

Amazon should show it had a "breakout" quarter for Alexa-enabled devices and navigated the holiday season without any notable shipping or logistics issues, the analyst said. 

Aside from the core online commerce platform, the AWS segment's fundamentals remain strong as estimated revenue scales to nearly $20 billion on a 40-percent growth rate, Yruma said. But investors should be mindful of the potential impact to AWS' margin profile after the Meltdown and Spectre vulnerabilities were made public, he said, adding that the topic will likely be discussed by management during the post-earnings conference call.

Yruma visited the Amazon Go concept store and said he left "impressed" at how the company integrated its technology into a shopping experience. The concept is likely "more of a learning lab than a needle-moving" opportunity today, but does show the company's forward thinking and commitment to targeting consumers online and offline, the analyst said. 

Price Action

Shares of Amazon were trading higher by 0.28 percent at $1,406 at the time of publication Thursday morning. 

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