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

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In the latest trading session, Amazon (AMZN - Free Report) closed at $3,488.24, marking a +0.36% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.16%.

Prior to today's trading, shares of the online retailer had gained 8.58% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.05% and the S&P 500's gain of 0.46% in that time.

AMZN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $8.72, down 29.51% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $111.73 billion, up 16.21% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $52.18 per share and revenue of $475.86 billion. These totals would mark changes of +24.74% and +23.26%, respectively, from last 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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. AMZN is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, AMZN currently has a Forward P/E ratio of 66.61. For comparison, its industry has an average Forward P/E of 49.29, which means AMZN is trading at a premium to the group.

Meanwhile, AMZN's PEG ratio is currently 2.42. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Commerce was holding an average PEG ratio of 2.2 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 203, putting it in the bottom 21% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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