Back to top

Image: Bigstock

Amazon (AMZN) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Amazon (AMZN - Free Report) closed at $3,221, marking a +0.98% move from the previous day. This move lagged the S&P 500's daily gain of 1.05%.

Prior to today's trading, shares of the online retailer had lost 8.29% over the past month. This has lagged the Retail-Wholesale sector's loss of 8.02% and the S&P 500's loss of 5.07% in that time.

Investors will be hoping for strength from AMZN as it approaches its next earnings release. In that report, analysts expect AMZN to post earnings of $8.72 per share. This would mark a year-over-year decline of 29.51%. Meanwhile, our latest consensus estimate is calling for revenue of $111.73 billion, up 16.21% from the prior-year quarter.

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.

Investors should also note any recent changes to analyst estimates for AMZN. These revisions help to show the ever-changing nature of near-term business trends. 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. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AMZN currently has a Zacks Rank of #3 (Hold).

In terms of valuation, AMZN is currently trading at a Forward P/E ratio of 61.13. This valuation marks a premium compared to its industry's average Forward P/E of 46.03.

Investors should also note that AMZN has a PEG ratio of 2.32 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce was holding an average PEG ratio of 2.32 at yesterday's closing price.

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 gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


See More Zacks Research for These Tickers


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


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

Published in