Preview of Amazon's (AMZN) Q4 Earnings, Due Out Tonight: Will the Retailer Be Able to Issue Another Amazin' Quarter?

Amazon.com (NASDAQ: AMZN) shares are trading higher this afternoon ahead of their fourth quarter earnings release, scheduled for after the market closes today, January 28, 2010. Shares of AMZN are up 3.11% to $126.60.

Amazon.com is expected to report an EPS of $0.72 on revs of $9.04 billion for Q409. Amazon posted an EPS of $0.45 and revs of $5.45 billion for Q309, beating the Street in both cases. Last year, for Q408, Amazon posted an EPS of $0.52 and revs of $6.7 billion, both beating. Amazon.com hasn't reported below Street EPS estimates since, at least Q407.

Data from Bloomberg shows that 23 analysts have a Buy on AMZN, 12 have a Hold, and 2 suggest to Sell. The analyst consensus price target is $148.21. The Street high is $180.00, and the low is $125.00.

Through their fourth quarter, Amazon shares have gained 44%, rising to a close of $134.52 on December 31, 2009. Through 2009, Amazon saw a rise of 162%.

The shares now trade at about 65x their FY09 EPS estimates, and 47.6x their FY10 EPS estimates. As a comparison, eBay (NASDAQ: EBAY) is at 14.2x, Overstock.com (NASDAQ: OSTK) is at 21.7x FY10 EPS estimates and Wal-Mart (NYSE: WMT) is trading at 14.6X FY10 EPS.

ANALYST RATINGS THROUGH Q409:
In October, GOldman Sachs raised their price target to $106, and maintained a Buy on the stock.

Benchmark and RBC Capital raised their price target just bofore Amazon's Q309 earnings release in October. Benchmark set their price target at $103, from $83, and RBC raised their target to $120 from $98, maintaining an Outperform on the stock.

Oppenheimer upgraded Amazon to Outperform from Perform, stating that they saw the sales decline last year bottom and start to reverse.

Benchmark, Barclays, Jefferies, and FBR Capital upgraded Amazon post-Q309 earnings. Benchmark to Buy, Barclays to Overweight, Jefferies to Buy, and FBR to Outperform.

In November, Needham downgraded AMZN from Buy to Hold.

Goldman then lifted their estimates, raising their price target to $146 from $126. Goldman sees Q409 revs of $9.1 billion, up from their previous estimate of $8.9 billion.

FBR Capital raised their price target in December to $160 from $130.

Citigroup reiterated their Buy rating while upping their price target to $170 from $140.

In early December, Jim Cramer set an astronomic price target of $210 on Amazon, just about peeing himself in the process.

Follwing the trend, UBS raised their price target to $160 from $140, and maintained their Buy rating. They see a Q409 EPS of $0.74.

Piper Jaffray set a new "Street high" price target of $172. THey raised their estimates for Q409 to an EPS of $0.84 and revs of $9.3 billion, up from $0.80 and $9 billion prior.

Finally, in late December, Kaufman couldn't resist and raised their price target to $155 from $120. THey have a Hold rating on the stock.

NEWS THROUGH Q409:
Amazon lowered the price of their Kindle reader in early October, from $299 to $259. They also added a U.S. and International wireless version, for $279.

Amazon and Wal-Mart began an internet book pricing barrage just ahead of the 2009 holiday shopping season. The prices of some of the hottest new books were dropped to $10 by Wal-Mart, then Amazon. Wal-Mart then promised and delivered on lowering their prices to $9. Moody's sided with Wal-Mart.

Amazon, in true fashion, blew out estimates for Q309. The then guided Q409 sales of $8.125 - $9.125 billion, shadowing the estimate at the time of $8.11 billion.

Amazon completed the acquisition of Zappos.com, solidifying the relationship. Amazon said that the management of Zappos would remain the same.

Finally, in their annual post-Holiday statement, the company said that the Kindle was the most gifted item ever on Amazon.com, though no numbers were released.

FINAL COMMENTS
Analysts love Amazon, and what's not to love? A true growth story over time that has been fairly consistent for the past 15 some years. In a recent Barron's article, and one of our own, the value and growth potential of the company is called into question. Some say that the valuation at 47X is high. Others believe that the company has its hands in so many operations, and is so well run, that it is a solid stock that should be in every portfolio. Will Apple's (NASDAQ: AAPL) iPad be a Kindle-Killer? With only a margin of their revenue coming from the Kindle, that answer could possibly be "so what?"

Let's see if Amazon can report another "amazin'" quarter.

Amazon will issue its Q409 results via press release at approximately 4:00 PM (EST) on January 28, 2010. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

You May Also Be Interested In

• VICI Properties closes $1.75B senior unsecured notes offering
• Blackhawk Network (HAWK) Reports Q2 Loss of $0.07; Offers Guidance
• KeyBanc Reiterates Underweight Rating on Apple (AAPL)