Amazon (AMZN) is set to announce its fourth-quarter 2023 results on Feb 1.

For the fourth quarter, the company forecasts net sales between $160 billion and $167 billion, reflecting a 7-12% year-over-year growth.

The Zacks Consensus Estimate for net sales stands at $166.26 billion, indicating an 11.4% increase from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for fourth-quarter earnings is 81 cents per share, marking a substantial surge from the 21 cents reported in the year-ago quarter. The figure moved 2.5% upward over the past seven days.

The company has consistently outperformed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 54.9%.

Amazon.com, Inc. Price and EPS Surprise

Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote

Holiday, Prime, Retail & Streaming Momentum to Aid

The company’s robust holiday performance, supported by strong holiday initiatives, is expected to have significantly contributed to top-line growth. Amazon achieved record-breaking sales on Black Friday and Cyber Monday.

Amazon’s expanding distribution network and Prime-enabled fast delivery, including Prime Free One Day and Prime Free Same-Day Delivery services, as well as strong grocery services, are anticipated to have bolstered the performance of its online retail business in the fourth quarter.

The company’s growing worldwide e-commerce business, coupled with the expanding global footprint of Prime, is believed to have positively impacted sales as well.

Furthermore, its aggressive approach to enhancing its physical presence is set to have benefited the quarterly performance.

The consensus estimate for the fourth quarter’s physical store sales indicates significant growth from the figure reported in the year-ago quarter.

Strengthening relationships with third-party sellers might have also remained a positive. Sales generated by third-party sellers are projected to have experienced robust growth from the prior-year quarter.

In the realm of streaming services, strong momentum across Prime Video is expected to have been a major tailwind in the soon-to-be-reported quarter. Expanding original content and overall content portfolios on Prime Video are likely to have accelerated Prime engagement.

Growth in Amazon Music is expected to have been reflected in the company’s fourth-quarter results as well, aiding subscription revenue growth.

AWS Portfolio Strength to Consider

The company’s expanding Amazon Web Services (“AWS”) portfolio is anticipated to have positively impacted the fourth quarter’s performance.

In the quarter under review, AWS introduced several innovative solutions, including a palm-based identity and a fully managed service called Amazon One Enterprise, a generative AI-powered chatbot, and new capabilities for AWS Supply Chain.

Additionally, its introduction of AWS Graviton4 and AWS Trainium2, as well as the general availability of Amazon Simple Storage Service (Amazon S3) Express One Zone, and new Amazon SageMaker capabilities, are expected to have propelled customer acquisitions and boosted AWS’s fourth-quarter revenues.

Smart Device Portfolio to Consider

Amazon’s robust Fire products family, portfolio of Echo smart speakers, Blink doorbells, and eero products are expected to have continued driving its financial performance in the fourth quarter. Moreover, the strengthening Alexa features are likely to have enhanced Amazon’s user experience.

However, inflationary pressure, geopolitical tensions, and foreign currency headwinds might have posed concerns.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But, Amazon has an Earnings ESP of -0.04% and a Zacks Rank #2 at present.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Apple (AAPL) has an Earnings ESP of +2.13% and a Zacks Rank #2 at present. Apple is set to release first-quarter fiscal 2024 results on Feb 1. The Zacks Consensus Estimate for AAPL’s earnings suggests a significant jump from the prior-year quarter.

Expedia Group (EXPE) has an Earnings ESP of +4.79% and a Zacks Rank #3 at