Amazon needs to get its house in order, according to Needham. Analyst Laura Martin lowered her 2023 estimates for Amazon, while maintaining her fourth quarter 2022 estimates, noting that the tech giant’s costs are almost at parity with its revenue. “It is our view that AMZN’s economic model has problems created by itself. That is, we hold our FY22 rev estimate constant at approximately $510B, and yet costs will represent nearly $500B in FY22, so that Operating Income for 1mm employees for an entire year of work will be about $11B (2% up margin) in FY22,” Martin wrote in a Thursday note. “Why is AMZN running a not-for-profit enterprise? At $510B of annual revs, AMZN clearly has scale. Is AMZN in a lousy business or do they do a lousy job running it?” she added. For 2023, Martin lowered her total net sales estimate to $564 billion, which is 5% below her previous estimate. Her EBITDA estimate of $82.7 billion is up 19% year over year, and 3% below her prior forecast. Her earnings per share forecast of $1.85 is also 15% below her previous forecast. Shares of Amazon are down more than 45% this year as the online retailer dealt with slowing growth in its core business amid rising inflation. This week, the stock briefly gave up all of its pandemic gains. Shares closed Wednesday at $86.77. In November, Amazon started laying off thousands of employees as CEO Andy Jassy started a review of the company’s expenses. Still, the restructuring may not be enough, according to Martin. “AMZN states that they are focused on cost-cutting. We don’t object. However, investors also want AMZN to demonstrate upside pricing power in 2023, since cost-cutting has limits to driving valuation upside,” Martin wrote. Amazon did not immediately respond to CNBC’s request for comment. —CNBC’s Michael Bloom contributed to this report.