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

Zacks Equity Research

Amazon (AMZN) closed the most recent trading day at $1,784.03, moving -0.37% from the previous trading session. This move lagged the S&P 500's daily loss of 0.04%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, added 0.05%.

Prior to today's trading, shares of the online retailer had gained 2.16% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.76% and the S&P 500's gain of 2.48% in that time.

AMZN will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMZN to post earnings of $3.98 per share. This would mark a year-over-year decline of 34.11%. Our most recent consensus estimate is calling for quarterly revenue of $85.98 billion, up 18.78% from the year-ago period.

AMZN's full-year Zacks Consensus Estimates are calling for earnings of $20.51 per share and revenue of $279.11 billion. These results would represent year-over-year changes of +1.84% and +19.85%, respectively.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. AMZN is currently a Zacks Rank #3 (Hold).

Digging into valuation, AMZN currently has a Forward P/E ratio of 87.31. This represents a premium compared to its industry's average Forward P/E of 21.33.

Meanwhile, AMZN's PEG ratio is currently 3.18. 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 industry currently had an average PEG ratio of 1.38 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% 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.

To follow AMZN in the coming trading sessions, be sure to utilize Zacks.com.


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