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

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In the latest trading session, Amazon (AMZN - Free Report) closed at $1,886.03, marking a +0.88% move from the previous day. This move outpaced the S&P 500's daily gain of 0.09%. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.62%.

Coming into today, shares of the online retailer had lost 1.99% in the past month. In that same time, the Retail-Wholesale sector gained 1.44%, while the S&P 500 gained 2.08%.

AMZN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $5.28, up 4.14% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $62.51 billion, up 18.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $26.55 per share and revenue of $275.24 billion. These totals would mark changes of +31.83% and +18.19%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for AMZN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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 has moved 0.16% lower within the past month. AMZN currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, AMZN is holding a Forward P/E ratio of 70.42. This represents a premium compared to its industry's average Forward P/E of 25.

It is also worth noting that AMZN currently has a PEG ratio of 2.13. 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. AMZN's industry had an average PEG ratio of 1.75 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 178, putting it in the bottom 31% 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.

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


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