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

Zacks Equity Research

Amazon (AMZN) closed at $1,902.88 in the latest trading session, marking a +1.49% move from the prior day. This move outpaced the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.

Prior to today's trading, shares of the online retailer had gained 7.73% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.87% and the S&P 500's gain of 4.69% in that time.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. On that day, AMZN is projected to report earnings of $3.98 per share, which would represent a year-over-year decline of 34.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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. Recent revisions tend to reflect the latest near-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. 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 1.22% lower within the past month. AMZN is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AMZN has a Forward P/E ratio of 71.48 right now. Its industry sports an average Forward P/E of 24.76, so we one might conclude that AMZN is trading at a premium comparatively.

We can also see that AMZN currently has a PEG ratio of 2.6. 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 industry currently had an average PEG ratio of 1.34 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 202, which puts it in the bottom 21% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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