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

Zacks Equity Research

Amazon (AMZN) closed at $2,680.38 in the latest trading session, marking a -0.46% move from the prior day. This move lagged the S&P 500's daily gain of 1.47%. Meanwhile, the Dow gained 2.32%, and the Nasdaq, a tech-heavy index, added 1.2%.

Prior to today's trading, shares of the online retailer had gained 12.15% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.81% and the S&P 500's gain of 0.74% in that time.

Investors will be hoping for strength from AMZN as it approaches its next earnings release. In that report, analysts expect AMZN to post earnings of $1.74 per share. This would mark a year-over-year decline of 66.67%. Our most recent consensus estimate is calling for quarterly revenue of $80.79 billion, up 27.42% from the year-ago period.

AMZN's full-year Zacks Consensus Estimates are calling for earnings of $20.02 per share and revenue of $349.03 billion. These results would represent year-over-year changes of -12.99% and +24.42%, respectively.

It is also important to note the recent changes to analyst estimates for AMZN. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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 1.4% higher within the past month. AMZN is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, AMZN is currently trading at a Forward P/E ratio of 134.48. This represents a premium compared to its industry's average Forward P/E of 47.72.

It is also worth noting that AMZN currently has a PEG ratio of 5.49. 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. AMZN's industry had an average PEG ratio of 1.66 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 77, which puts it in the top 31% 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.

To follow AMZN in the coming trading sessions, be sure to utilize Zacks.com.


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