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E-Commerce Stocks' Q1 Earnings Due on Apr 27: AMZN, EXPE

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The first-quarter earnings season is picking up pace, with results from 95 S&P 500 members or 24.9% of the index’s total market capitalization already out (as of Apr 21). We expect almost 800 companies to report results this week, including 191 S&P 500 members.

Per the latest Earnings Preview, total earnings of the index members that reported results were up 14.3% year over year on the back of 4.6% higher revenues. Beat ratios are impressive with 72.6% beating earnings estimates and 62.1% coming ahead of revenue expectations.

Investors seem to be rejoicing as most of the companies have so far surpassed their estimates, particularly revenue estimates, in the first quarter. Also, growth rate is up from the preceding quarter and is on track to reach its highest level in almost three years. Continuation of these trends through the rest of this earnings season should serve as a reassuring development for the market.

Total Q1 earnings are expected to rise 9.1% from the year-ago period on revenue growth of 6.0%. Five out of 16 Zacks sectors are expected to witness a decline in earnings in the first quarter, with Conglomerates, Autos and Transportation being the biggest drag.

Technology will be in the spotlight this week, with several major companies including Alphabet (GOOGL - Free Report) aka Google, Microsoft and Amazon, scheduled to report results.

E-commerce is one of the most important components of the technology sector. The online trend continues to gather steam as the younger generation is rapidly adopting fast-advancing technology. Also, improvements in the mobile device segment have led the online companies to deliver strong numbers.

Here, we take a sneak peek into two major e-commerce providers Amazon (AMZN - Free Report) and Expedia (EXPE - Free Report) that are lined up to report first-quarter earnings results on Apr 27:

Amazon, the world's largest Internet retailer, delivered a positive earnings surprise of 10.0% last quarter. In fact, Amazon outperformed the Zacks Consensus Estimate thrice in the last four quarters, with an average positive surprise of 25.68%.

Per our proven model, a company must have the right combination of a favorable Zacks Rank (Zacks Rank #3 (Hold) or better) and a positive Earnings ESP to pull off an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Earnings ESP for Amazon is +4.90%. This is because the Most Accurate estimate stands at $1.07 while the Zacks Consensus Estimate is pegged at $1.02. The company also carries a Zacks Rank #3, which increases the predictive power of ESP. Therefore, we are reasonably confident in looking for an earnings beat. (Read more: Amazon.com Q1 Earnings: Is it Poised to Top Estimates?)

Amazon.com, Inc. Price and EPS Surprise

 

Amazon.com, Inc. Price and EPS Surprise | Amazon.com, Inc. Quote

Expedia, a leading online travel companies in the world, however, is unlikely to beat first-quarter earnings estimates as it has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

Notably, Expedia missed the consensus mark in two out of the last four quarters, resulting in a positive average surprise of 6.29%. (Read more: Expedia Q1 Earnings: Is a Disappointment in Store?)

Expedia, Inc. Price and EPS Surprise

 

Expedia, Inc. Price and EPS Surprise | Expedia, Inc. Quote

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