Should You Buy Amazon ETFs Ahead of Q2 Earnings?

Sweta Killa Published on July 24, 2019

Amazon (AMZN - Free Report) is set to release second-quarter 2019 results on Jul 25 after market close. Being a market leader in online e-commerce, it is worth taking a look at the company’s fundamentals ahead of its results (see: all the Consumer Discretionary ETFs here).

Amazon has gained 4.3% over the past three months, easily outperforming the industry’s average growth of 0.4%. The outperformance is likely to continue as Amazon is poised to beat the Zacks Consensus Estimate for earnings and has attractive fundamentals.

Inside Our Methodology

Amazon has a Zacks Rank #3 (Hold) and an Earnings ESP of +15.56%, indicating reasonable chances of beating estimates this quarter. Betting on stocks that have a combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 usually leads to profits. Our research shows that the chance of a positive earnings surprise is as high as 70% for stocks with this combination. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The stock has seen positive earnings estimate revision of a penny over the past 30 days for the second quarter. The Zacks Consensus Estimate indicates increase of 4.34% from the year-ago reported figure. Analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator for the stock (read: What's In Store for FAANG ETFs in Q2 Earnings?).

Amazon’s earnings surprise history is also impressive, with a positive earnings surprise of 60.25% on average for the last four quarters. Additionally, the company is expected to report revenue growth of 18.2%. The stock has a solid Growth Score of B and falls under a top-ranked Zacks industry (top 24%).

According to analysts polled by Zacks, Amazon has an average target price of $2,204.44, with nearly 96% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings.

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