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Amazon (AMZN) Stock Hits All-Time High, Should You Buy Now?
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Amazon (AMZN - Free Report) continued its seemingly never-ending bullish streak in morning trading Tuesday, hitting an all-time high of $723.20 per share and blowing by Facebook in market value by over $2 billion. The e-commerce innovator-turned-technology giant has certainly impressed recently, but can it keep pushing even higher?
Earnings and Growth
Amazon will face a tough challenge in maintaining its absurd growth rates. For fiscal 2016, the company’s earnings are expected to grow by an astonishing 327%. This number is supported by cash flow growth of 53% and projected sales growth of 25%. These numbers all shatter the industry average and earn Amazon an “A” grade for Growth in our Style Scores system.
Of course, it will be tough for Amazon to maintain that rate of growth in the long-tem. Next year, earnings growth is expected to slow back down to about 80%. Over the next five years, analysts are expecting the company to grow its earnings by an average rate of 43%.
However, when looking at Amazon’s earnings estimate revision activity, we also see some impressive signs. For the current quarter, we have seen nine positive revisions within the past 30 days. For the full fiscal year, we have seen 11 positive revisions in that same time frame.
Held Back By Value
Despite the positives, Amazon might be held back by its value metrics. Right now, the company has a “D” grade in Value. While its growth has been impressive, Amazon must justify its insanely high P/E ratio of 133.26. Amazon’s PEG ratio of 3.08 and P/S ratio of 2.50 also come in well above the industry average.
As with many stocks that hit all-time highs, Amazon will probably hit a feeling-out period wherein investors decide whether or not the stock deserves a new ceiling. There are many, many things going right for the company right now, but the market may push back at its weak value metrics. As for now, Amazon remains a Zacks Rank #3 (Hold).
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Amazon (AMZN) Stock Hits All-Time High, Should You Buy Now?
Amazon (AMZN - Free Report) continued its seemingly never-ending bullish streak in morning trading Tuesday, hitting an all-time high of $723.20 per share and blowing by Facebook in market value by over $2 billion. The e-commerce innovator-turned-technology giant has certainly impressed recently, but can it keep pushing even higher?
Earnings and Growth
Amazon will face a tough challenge in maintaining its absurd growth rates. For fiscal 2016, the company’s earnings are expected to grow by an astonishing 327%. This number is supported by cash flow growth of 53% and projected sales growth of 25%. These numbers all shatter the industry average and earn Amazon an “A” grade for Growth in our Style Scores system.
Of course, it will be tough for Amazon to maintain that rate of growth in the long-tem. Next year, earnings growth is expected to slow back down to about 80%. Over the next five years, analysts are expecting the company to grow its earnings by an average rate of 43%.
However, when looking at Amazon’s earnings estimate revision activity, we also see some impressive signs. For the current quarter, we have seen nine positive revisions within the past 30 days. For the full fiscal year, we have seen 11 positive revisions in that same time frame.
Held Back By Value
Despite the positives, Amazon might be held back by its value metrics. Right now, the company has a “D” grade in Value. While its growth has been impressive, Amazon must justify its insanely high P/E ratio of 133.26. Amazon’s PEG ratio of 3.08 and P/S ratio of 2.50 also come in well above the industry average.
As with many stocks that hit all-time highs, Amazon will probably hit a feeling-out period wherein investors decide whether or not the stock deserves a new ceiling. There are many, many things going right for the company right now, but the market may push back at its weak value metrics. As for now, Amazon remains a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>