Amazon.com, Inc. (NASDAQ:AMZN) is scheduled to release its next earnings report on Jan. 29, and analysts from at least one firm have actually upgraded the company’s stock before that report. Consensus estimates suggest the company could report earnings of 26 cents per share on revenue of $29.7 billion.

Why Amazon received an upgrade

In a report dated Jan. 21, BGC analyst Colin Gillis said he has upgraded Amazon fromHold to Buy and maintained his price target of $340 per share. His upgrade comes less than a month after Canaccord Genuity cut its price target for Amazon.

He noted that shares of the online retailer have declined by more than 22% this past year because investors have gotten tired of waiting for management to stop investing in everything. They had been sinking cash into more and more fulfillment centers but more recently have shifted to TV and movie content and then a broad range of hardware.

Amazon has posted GAAP losses in the last couple of quarters, but Gillis expects the online retailer to report a return to profitability in the December quarter. He also expects the company to see profitability in the current quarter, so he’s turn positive on it.

Why be positive on Amazon?

In the near term, Gillis said he expects Amazon to benefit from improvements in media sales and profitability in North America because the dispute with Hachette is now over. He believes the operating margin for North America will rebound to 4.2%, which is a significant improvement from the previous quarter’s margin of 0.7% and closer to the December 2013 margin of 4.7%.

In the long term, he likes Amazon’s plan to build a full ecosystem aimed at delivering not only physical goods but also digital ones. He notes that the company has rapidly expanded the number of offerings that are eligible for its Prime service. He sees potential in the company’s App Store and believes in the strategy of speeding up consumption on its app platform by selling hardware at cost.

The analyst also likes the potential for Amazon’s ad business and said he thinks that the company’s position to be able to target customers based on their past purchases, locations and content habits is among the best in the business.

What to expect in Amazon’s earnings report

Gillis is actually ahead of consensus estimates in his projections for Amazon’s December quarter. He expects to see revenue of $30.1 billion, a 17.8% growth rate year over year. For earnings, he’s projecting 50 cents per share.

The analyst expects to see net sales of $18.9 billion in North America for the quarter, making up 62.7% of Amazon’s total revenue. He’s estimating net sales of $11.2 billion internationally. Gillis projects $7.7 billion in media revenue and worldwide shipping revenue of $1.59 billion.