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Netflix Wowed Investors With Its Earnings Report, Will Fellow 'FANG' Member Amazon Follow Suit?

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Netflix Wowed Investors With Its Earnings Report, Will Fellow 'FANG' Member Amazon Follow Suit?
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Netflix, Inc. (NASDAQ: NFLX)'s blowout quarter impressed both analysts and investors, but now all the attention will focus on the remaining "FANG" members yet to report their earnings, including Amazon.com, Inc. (NASDAQ: AMZN), which will report its second-quarter results Thursday.

Expectations heading into Netflix's earnings were positive, but many aspects of its earnings report, including subscriber metrics, came in much better than expected, David Seaburg, head of sales trading at Cowen and Co. said during a recent CNBC "Trading Nation" segment. There are many parallels heading into Amazon's report in which the e-commerce giant could smash expectations.

Specifically, analysts are expecting Amazon to report an "incredibly low" operating income of just $550 million, which implies an operating margin of only 1.5 percent, Seaburg continued. From a historical perspective, this number hasn't been that low over the past 10 years.

A strong quarter on a relatively low bar should also prompt the Street to revise its full-year expectations higher for the "FANG" member, he added. Amazon could further impress investors by confirming a "significant" slowdown in spending over the back half of 2017 after heightened spending in content and fulfillment centers.

"I'm pounding the table on Amazon, there's no question about it," Seaburg said. "They are going to report a good quarter."

Finally, Amazon's stock could gain as much as 6 percent after the earnings report which gives Seaburg confidence; he concludes that buying shares is "easily a nice long trade into the quarter."

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Posted-In: Amazon EarningsCNBC Earnings News Previews Tech Media Trading Ideas Best of Benzinga

 

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