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

Zacks Equity Research

Amazon (AMZN) closed at $1,776.29 in the latest trading session, marking a -0.57% move from the prior day. This change lagged the S&P 500's 0.06% gain on the day. Meanwhile, the Dow gained 0.16%, and the Nasdaq, a tech-heavy index, lost 0.13%.

Heading into today, shares of the online retailer had lost 3.71% over the past month, lagging the Retail-Wholesale sector's loss of 1.4% and the S&P 500's loss of 2.95% in that time.

AMZN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $4.60, down 20% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $68.52 billion, up 21.1% from the prior-year quarter.

AMZN's full-year Zacks Consensus Estimates are calling for earnings of $24.19 per share and revenue of $277.88 billion. These results would represent year-over-year changes of +20.11% and +19.32%, respectively.

Investors might also notice 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.

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, 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 1.35% lower within the past month. AMZN is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, AMZN is holding a Forward P/E ratio of 73.86. This valuation marks a premium compared to its industry's average Forward P/E of 23.57.

Investors should also note that AMZN has a PEG ratio of 2.29 right now. 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 1.49 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 112, which puts it in the top 44% 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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