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

Zacks Equity Research

In the latest trading session, Amazon (AMZN) closed at $1,847.84, marking a +0.05% move from the previous day. The stock lagged the S&P 500's daily gain of 0.3%. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.3%.

Prior to today's trading, shares of the online retailer had gained 3.66% over the past month. This has outpaced the Retail-Wholesale sector's gain of 2.32% and the S&P 500's gain of 2.69% in that time.

Investors will be hoping for strength from AMZN as it approaches its next earnings release. The company is expected to report EPS of $4.65, down 23.01% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $85.98 billion, up 18.79% from the year-ago period.

Any recent changes to analyst estimates for AMZN should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. AMZN is currently a Zacks Rank #3 (Hold).

Investors should also note AMZN's current valuation metrics, including its Forward P/E ratio of 90.06. This valuation marks a premium compared to its industry's average Forward P/E of 22.83.

Also, we should mention that AMZN has a PEG ratio of 3.28. 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 was holding an average PEG ratio of 1.47 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 22% 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.

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


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