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

Zacks Equity Research

In the latest trading session, Amazon (AMZN) closed at $1,817.46, marking a -0.28% move from the previous day. This change lagged the S&P 500's daily gain of 0.03%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq lost 0.11%.

Prior to today's trading, shares of the online retailer had gained 1.18% over the past month. This has lagged the Retail-Wholesale sector's gain of 4.61% and the S&P 500's gain of 4.17% in that time.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. The company is expected to report EPS of $4.41, down 23.3% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $68.52 billion, up 21.1% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $24.01 per share and revenue of $277.88 billion, which would represent changes of +19.22% and +19.32%, respectively, from the prior year.

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

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 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. Within the past 30 days, our consensus EPS projection has moved 1.5% lower. AMZN is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, AMZN is currently trading at a Forward P/E ratio of 75.9. For comparison, its industry has an average Forward P/E of 31.25, which means AMZN is trading at a premium to the group.

We can also see that AMZN currently has a PEG ratio of 2.32. 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 1.75 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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