Back to top

Image: Bigstock

Amazon (AMZN) Stock Sinks As Market Gains: What You Should Know

Read MoreHide Full Article

Amazon (AMZN - Free Report) closed the most recent trading day at $3,449.08, moving -1.56% from the previous trading session. This change lagged the S&P 500's 0.58% gain on the day.

Prior to today's trading, shares of the online retailer had gained 7.31% over the past month. This has outpaced the Retail-Wholesale sector's gain of 3.43% and the S&P 500's gain of 2.17% in that time.

AMZN will be looking to display strength as it nears its next earnings release. On that day, AMZN is projected to report earnings of $12.16 per share, which would represent year-over-year growth of 18.06%. Our most recent consensus estimate is calling for quarterly revenue of $115.05 billion, up 29.4% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $57.42 per share and revenue of $489.97 billion, which would represent changes of +37.27% and +26.92%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AMZN. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.09% higher. AMZN currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that AMZN has a Forward P/E ratio of 61.02 right now. For comparison, its industry has an average Forward P/E of 58.91, which means AMZN is trading at a premium to the group.

Also, we should mention that AMZN has a PEG ratio of 2.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 219, which puts it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMZN in the coming trading sessions, be sure to utilize Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Amazon.com, Inc. (AMZN) - free report >>

Published in