Amazon.com, Inc. (NASDAQ:AMZN) shares could hit $370 in the next twelve months, according to a new report from Susquehanna Financial Group. Analyst Brian Nowak likes the likes the company’s first party margins heading into the next earnings report, and thinks that gross profit in third party sales are likely to come in higher than expected as well.

Amazon

Nowak is very optimistic about Amazon.com, Inc. (NASDAQ:AMZN) in the coming months and justifies his massive price target with reference to several different parts of the business. Amazon, which suffered a loss last year, is often criticized for being massively overvalued. A $370 price on the company’s shares would value the company at more than 420 times expected 2013 earnings.

Amazon margins on the rise

According to the Susquehanna report, Amazon.com, Inc. (NASDAQ:AMZN) will see a 50 basis points expansion in gross margins on first party sales in the third quarter earnings report. That would be the biggest expansion in first party gross margins this year, and would leave the number at 17.6 percent, not bad for a retailer.

The Amazon.com Inc. (NASDAQ:AMZN) gross margin from its mix of first party and third party sales and Amazon Web Services, is also in for an increase, according to Nowak. He’s looking for GM of 27.4 percent from the entire business in the company’s earnings report for the third quarter of the year.

Nowak expects losses per share to come in at 18 cents per share for the quarter, well below the consensus estimate of 10 cents loss for the quarter. Despite the expectation of a huge loss, the analyst is still very optimistic on the company as it continues to expand its business with massive amounts of investment.

Amazon risk factor

The lack of consistent earnings from Amazon.com, Inc. (NASDAQ:AMZN) is a massive worry for investors in the firm, but it needn’t be, according to this report. Nowak says that Amazon’s ability to manage long-term earnings growth prospects by generating higher gross profit is a good indicator for the company. That might not be enough to swing some investors, but Nowak is confident that the company is in for a successful future.

Amazon.com, Inc. (NASDAQ:AMZN) is expected to make a slim profit this year, but if the Susquehanna report is right it will be a great deal slimmer than expected. An 18 cent loss in the next earnings report could be disastrous for shares in the short-term, despite outlook in the long-term.