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

·3 min read

Amazon (AMZN) closed at $128.63 in the latest trading session, marking a +1.43% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.34%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq lost 0.05%.

Heading into today, shares of the online retailer had lost 12.41% over the past month, lagging the Retail-Wholesale sector's loss of 6.76% and the S&P 500's loss of 7.95% in that time.

Wall Street will be looking for positivity from Amazon as it approaches its next earnings report date. The company is expected to report EPS of $0.27, down 12.9% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $128.19 billion, up 15.68% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.21 per share and revenue of $523.76 billion, which would represent changes of -93.52% and +11.48%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Amazon. 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.

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 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 0.75% higher within the past month. Amazon is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Amazon has a Forward P/E ratio of 601.3 right now. For comparison, its industry has an average Forward P/E of 24.27, which means Amazon is trading at a premium to the group.

We can also see that AMZN currently has a PEG ratio of 26.51. 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. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.25 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 36% 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.

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


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