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Amazon (AMZN) Gains As Market Dips: What You Should Know

Zacks Equity Research
Sterling Bancorp (STL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Amazon (AMZN) closed at $1,934.36 in the latest trading session, marking a +1.04% move from the prior day. This move outpaced the S&P 500's daily loss of 0.35%. At the same time, the Dow lost 0.68%, and the tech-heavy Nasdaq gained 0.08%.

Heading into today, shares of the online retailer had gained 0.64% over the past month, lagging the Retail-Wholesale sector's gain of 0.72% and the S&P 500's gain of 2.47% in that time.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. This is expected to be October 25, 2018. The company is expected to report EPS of $3.25, up 525% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $56.92 billion, up 30.12% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $17.77 per share and revenue of $234.35 billion. These totals would mark changes of +290.55% and +31.76%, respectively, from last year.

Any recent changes to analyst estimates for AMZN should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, 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 0.94% higher within the past month. AMZN is currently a Zacks Rank #2 (Buy).

In terms of valuation, AMZN is currently trading at a Forward P/E ratio of 107.78. This represents a premium compared to its industry's average Forward P/E of 29.75.

It is also worth noting that AMZN currently has a PEG ratio of 3.99. 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 2.14 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 215, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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