Back to top

Image: Bigstock

Amazon (AMZN) Declines More Than Market: Some Information for Investors

Read MoreHide Full Article

Amazon (AMZN - Free Report) closed at $216.41 in the latest trading session, marking a -1.66% move from the prior day. This change lagged the S&P 500's 0.16% loss on the day. Meanwhile, the Dow experienced a rise of 0.44%, and the technology-dominated Nasdaq saw a decrease of 0.76%.

The online retailer's stock has dropped by 4.91% in the past month, falling short of the Retail-Wholesale sector's loss of 4.08% and the S&P 500's gain of 1.14%.

The investment community will be closely monitoring the performance of Amazon in its forthcoming earnings report. In that report, analysts expect Amazon to post earnings of $1.58 per share. This would mark year-over-year growth of 10.49%. At the same time, our most recent consensus estimate is projecting a revenue of $177.93 billion, reflecting a 11.99% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.81 per share and revenue of $708.66 billion. These totals would mark changes of +23.15% and +11.08%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Amazon. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.95% higher. Amazon currently has a Zacks Rank of #3 (Hold).

Looking at valuation, Amazon is presently trading at a Forward P/E ratio of 32.3. This indicates a premium in contrast to its industry's Forward P/E of 21.38.

Investors should also note that AMZN has a PEG ratio of 1.46 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 1.45.

The Internet - Commerce industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 88, placing it within the top 36% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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