Cathie Wood is adding to her Amazon shares before announcing her earnings

It's almost time for it Amazon (NASDAQ:AMZN) will report 3Q24 results. The e-commerce giant is expected to release its latest financial report once market action comes to a halt on Thursday (October 31).

After a mixed second quarter that saw Amazon's share price fall, investors are now looking to see if the company can offer a more favorable result this time. While the results are still pending, at least one prominent market figure is optimistic as the release draws closer.

Ark Invest CEO Cathie Wood was busy adding to AMZN stock in October, purchasing 238,892 shares through her ARKK, ARKQ and ARKW ETFs. This shipment is currently worth approximately $46 million.

Wood isn't the only one confident that Amazon is on its way to profitability. Evercore's Mark Mahaney, an analyst ranked in the top 1% of Street stock experts, has a lot of good things to say about the company.

“Amazon remains our top large cap long over a 12-month time horizon as we believe AWS recovers to sustainable premium revenue growth (20%). Amazon's retail segment should continue to be a significant share gainer, and core retail operating margins should continue to do so.” “We're growing well, Amazon's advertising revenue should reach a positive inflection point thanks to APV, and AMZN will benefit from the ongoing mix shift to higher margin , benefit from higher growth cloud and advertising revenue,” said Mahaney.

As for the numbers, Mahaney forecasts revenue of $157 billion, GAAP operating income of $14.8 billion (a 9.4% margin) and GAAP EPS of $1.26 – placing his estimates at the high end of Amazon's forecast range of $154 billion to $158.5 billion in revenue and $11.5 billion to $15 billion in operating profit. These numbers also line up well with Wall Street estimates, which call for revenue of $157.2 billion, operating profit of $14.7 billion and earnings per share of $1.14.

Consensus expectations are for fourth-quarter revenue to rise 18% sequentially, which Mahaney said is plausible, although “not conservative.”

The difference between Mahaney and The Street lies in fourth-quarter operating income. The consensus is ~$17.5 billion, but Mahaney is almost $1 billion lower, forecasting $16.6 billion. “We believe this Q4 OI risk has been well received by investors,” the analyst said on the subject, “but the Street number still appears inherently aggressive, with or without material Kuiper launch costs.”

Still, Mahaney doesn't believe there are “any structural issues” and still expects a robust operating margin expansion of more than 100 basis points, even when factoring in Kuiper's $300 million in operating costs.

All in all, Mahaney rates AMZN stock an Outperform (i.e. Buy) with a price target of $240, meaning the stock will rise 24.5% from current levels. (To view Mahaney's track record, click here)

The Street's average price target is slightly more modest, but at $224.14 it still suggests shares have room for growth of about 16% next year. Based on a lopsided mix of 46 Buys vs. 2 Holds, the analyst consensus rates the stock a Strong Buy. (See Amazon stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important to do your own analysis before investing.