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

Zacks Equity Research

Amazon (AMZN) closed at $1,736.43 in the latest trading session, marking a +0.26% move from the prior day. This move outpaced the S&P 500's daily loss of 0.14%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the online retailer had lost 6.06% over the past month, lagging the Retail-Wholesale sector's loss of 1.96% and the S&P 500's loss of 0.91% in that time.

AMZN will be looking to display strength as it nears its next earnings release, which is expected to be October 24, 2019. In that report, analysts expect AMZN to post earnings of $4.41 per share. This would mark a year-over-year decline of 23.3%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $68.57 billion, up 21.21% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $24.01 per share and revenue of $278.09 billion, which would represent changes of +19.22% and +19.41%, respectively, from the prior year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMZN currently has a Zacks Rank of #3 (Hold).

Investors should also note AMZN's current valuation metrics, including its Forward P/E ratio of 72.12. This valuation marks a premium compared to its industry's average Forward P/E of 25.6.

It is also worth noting that AMZN currently has a PEG ratio of 2.2. 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. The Internet - Commerce was holding an average PEG ratio of 1.58 at yesterday's closing price.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% 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.

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


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