should report impressive fourth-quarter sales on Thursday, fueled by the holiday season, while Wall Street will watch for clues about the retailer's profit margins in 2011.

The company, which began as a Web bookstore and now is the world's largest online retailer, reported revenue gains of at least 39 percent in the past three quarters, and shares reached all-time highs last week, reflecting Wall Street's high expectations.

The company will provide a first glimpse of its profit expectations for 2011 after the U.S. stock market closes on Thursday. This could show that investments and a focus on revenue, rather than profit, will continue to temper margins.

Shares of Amazon were up $5.02, or 2.9 percent, at $180.41 Thursday morning on the New York Stock Exchange.

Analysts want to see a payoff on investments that took Wall Street off guard in the second quarter of 2010, including new distribution centers.

Amazon historically has dismissed criticism about margin growth and focused on building its revenue base through loyalty programs such as Amazon Prime, which charges $79 per year for unlimited free shipping. Such deals, it says, ensure that customers buy more products and turn to Amazon as their primary online retailer.

Recent positive results from Google Inc and eBay point to strong online commerce performance during the holiday shopping season, said Barclays Capital analyst Douglas Anmuth.

We believe Amazon needs to report revenue at least at the high end of guidance ... even with some recent pullback in the shares, he wrote, adding that he expects margins to expand in the second half of 2011.

The company, whose Kindle e-reader is the best-selling such device in the market, also operates a Web-hosting business and offers other services to businesses, such as fulfillment.

Regardless of how shares react to Thursday's results, some financial analysts will see Amazon as overvalued.

The company's stock price is 70 times expected 2011 earnings, far exceeding competitors in technology and retail.

If Amazon traded at the 15 times 2011 earnings multiple that the market gives to Apple Inc , its share price would be $52, said BGC Partners analyst Colin Gillis in a note to clients on Wednesday.

And we note that Apple grew its revenue approximately twice as fast as our estimated Amazon December quarter revenue growth, said Gillis, who rates the stock a sell.

Analysts on average expect fourth-quarter revenue of $12.99 billion on earnings of 88 cents per share, according to Thomson Reuters I/B/E/S.

For the first quarter, Wall Street expects operating profit of $469 million on revenue of $9.31 billion. For 2011, analysts expect operating profit of $2.2 billion on revenue of $44 billion.

Amazon does not give forecasts for per-share earnings, focusing instead on operating profit.

(Reporting by Alexandria Sage. Editing by Robert MacMillan)