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

Zacks Equity Research
·3 mins read

In the latest trading session, Amazon (AMZN) closed at $3,190.55, marking a -0.16% move from the previous day. This change lagged the S&P 500's daily gain of 0.8%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.5%.

AMZN will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMZN to post earnings of $7.33 per share. This would mark year-over-year growth of 73.29%. Our most recent consensus estimate is calling for quarterly revenue of $92.82 billion, up 32.64% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $31.81 per share and revenue of $369.99 billion, which would represent changes of +38.24% and +31.89%, respectively, from the prior year.

Any recent changes to analyst estimates for AMZN should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% lower. AMZN is currently a Zacks Rank #4 (Sell).

Investors should also note AMZN's current valuation metrics, including its Forward P/E ratio of 100.46. This represents a premium compared to its industry's average Forward P/E of 50.4.

Also, we should mention that AMZN has a PEG ratio of 3.33. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Commerce industry currently had an average PEG ratio of 3.33 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 118, putting it in the top 47% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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