Amazon.com is sailing toward its first-quarter earnings report with a close-to-record market valuation, as Wall Street bets that the Seattle e-commerce juggernaut will keep showing proof of spectacular growth.

Share story

Amazon.com is sailing toward its first-quarter earnings report with a close-to-record market valuation, as Wall Street bets that the Seattle e-commerce juggernaut will keep showing proof of spectacular growth.

The company reports earnings after the stock market closes Thursday. Analysts on average expect Amazon to post a profit for the quarter of $1.13 a share, up from $1.07 in the same period a year ago.

Revenue, perhaps the clearest indication of Amazon’s performance and size, is expected to balloon to $35.31 billion, up 21 percent from sales reported a year ago.

More earnings reports

Amazon shares closed at $907.62 Tuesday, giving the company a $433.8 billion market capitalization, the fourth largest for a publicly traded U.S. company. Shares hit a record high of $923.72 in the first week of April.

The surge has come as investment banks and research firms up their stock-price targets for the company, which last month acquired an e-commerce website in the Middle East and has shown increasing efforts to expand into food retail and fashion.

To be sure, Amazon’s stock has stumbled after previous quarterly reports, often as the company surprised shareholders with larger-than-expected investments in its multipronged strategy to dominate the retail world. The stock’s volatility could be accentuated by the recent run-up in share prices.

Tuna Amobi, an analyst with CFRA Research, acknowledges that the stock is “richly valued,” but at the same time — compared to the performance of other retailers — “there’s a case to be made for more upside in the shares.”

Amobi says Amazon is becoming more profitable with the growth of its higher-margin businesses, such as providing logistics for third-party merchants or renting out computing power and storage.

So analysts will be on the lookout for continued signs of that growth — anything that might hint at the company recruiting more members into its Prime loyalty program, for example, or the pace of expansion of Amazon Web Services, the cloud-computing unit that dominates that field but also faces increased competition from Microsoft, Google and others.

Other things to watch for, Amobi says, are shipping costs, which have shown a tendency to escalate in recent quarters as the company stresses near-immediate delivery, and investments in content.

Amazon’s Prime Video service, which recently launched globally, has become a big rival to Netflix — and a big recipient of Amazon’s investment dollars, Amobi says.