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Amazon (AMZN) Dips More Than Broader Markets: What You Should Know

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Amazon (AMZN - Free Report) closed the most recent trading day at $3,229.72, moving -0.66% from the previous trading session. This change lagged the S&P 500's 0.14% loss on the day. Meanwhile, the Dow lost 0.45%, and the Nasdaq, a tech-heavy index, lost 0.02%.

Heading into today, shares of the online retailer had lost 5.61% over the past month, lagging the Retail-Wholesale sector's loss of 4.76% and the S&P 500's loss of 0.13% in that time.

Wall Street will be looking for positivity from Amazon as it approaches its next earnings report date. On that day, Amazon is projected to report earnings of $3.90 per share, which would represent a year-over-year decline of 72.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $137.63 billion, up 9.62% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Amazon. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Amazon is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 63.22. For comparison, its industry has an average Forward P/E of 31.3, which means Amazon is trading at a premium to the group.

It is also worth noting that AMZN currently has a PEG ratio of 2.56. 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. The Internet - Commerce industry currently had an average PEG ratio of 1.45 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 27% 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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