U.S. markets close in 6 hours 14 minutes
  • S&P 500

    4,408.89
    -14.26 (-0.32%)
     
  • Dow 30

    34,908.44
    -207.96 (-0.59%)
     
  • Nasdaq

    14,782.09
    +20.79 (+0.14%)
     
  • Russell 2000

    2,204.78
    -18.80 (-0.85%)
     
  • Crude Oil

    68.50
    -2.06 (-2.92%)
     
  • Gold

    1,835.70
    +21.60 (+1.19%)
     
  • Silver

    26.06
    +0.48 (+1.87%)
     
  • EUR/USD

    1.1899
    +0.0031 (+0.26%)
     
  • 10-Yr Bond

    1.1370
    -0.0390 (-3.32%)
     
  • GBP/USD

    1.3953
    +0.0038 (+0.27%)
     
  • USD/JPY

    108.7750
    -0.2750 (-0.25%)
     
  • BTC-USD

    39,178.93
    +593.56 (+1.54%)
     
  • CMC Crypto 200

    960.62
    +33.85 (+3.65%)
     
  • FTSE 100

    7,115.80
    +10.08 (+0.14%)
     
  • Nikkei 225

    27,584.08
    -57.75 (-0.21%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

This shocking stat will make you want to buy Amazon stock after its recent beatdown: analyst

·Anchor, Editor-at-Large
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

To buy the Amazon post third quarter earnings report stock price dip or not to buy? That is the million dollar question.

The data suggests to pull the trigger before it’s too late.

Amazon’s (AMZN) stock price has dropped in four of the past six years on the day following its third quarter earnings, points out Jefferies analyst Brent Thill. The company’s third quarter earnings report is often very volatile as the digital beast spends aggressively ahead of the holiday season. That usually doesn’t jibe well with always inflated expectations on Wall Street regarding Amazon’s profits.

This go around looks to be no different. Amazon shares fell 6% in pre-market trading on Friday as third quarter earnings badly whiffed consensus forecasts, coming in at $4.23 a share versus the $4.58 a share expected. Profits were held back by Amazon’s $800 million investment in the expansion of one-day delivery services. Meanwhile, Amazon Web Services sales growth slowed to 35% versus 37% in the second quarter. Amazon Web Services (AWS) also saw its profit margins come under pressure amid increased competitive activity in cloud services.

The company warned on fourth quarter profits, as it prepared to spend $1.5 billion more in its one-day delivery rollout.

FILE- In this Aug. 3, 2017, file photo, packages ride on a conveyor system at an Amazon fulfillment center in Baltimore. Amazon, which is racing to deliver packages faster, is turning to its employees with a proposition: Quit your job and we’ll help you start a business delivering Amazon package. The offer, announced Monday, May 13, 2019, comes as Amazon seeks to speed up its shipping time from two days to one for its Prime members. (AP Photo/Patrick Semansky, File)
FILE- In this Aug. 3, 2017, file photo, packages ride on a conveyor system at an Amazon fulfillment center in Baltimore. Amazon, which is racing to deliver packages faster, is turning to its employees with a proposition: Quit your job and we’ll help you start a business delivering Amazon package. The offer, announced Monday, May 13, 2019, comes as Amazon seeks to speed up its shipping time from two days to one for its Prime members. (AP Photo/Patrick Semansky, File)

But based on Thill’s research, the third quarter pullbacks in Amazon’s stock is most often the time to buy. Amazon’s stock has gained each year in the following 90 days after negative reactions (four of the past six years) to its third quarter earnings, returning an average of 6%. Thill’s research looks at the last six years of performance. The stock has outperformed the Nasdaq Composite by an average of 100 basis points. Including the two years out of the past six where Amazon’s stock rose following third quarter earnings, the stock has returned an average of 8% in the following 90 days and outperformed the Nasdaq by 500 basis points.

Thill continues to rate Amazon’s stock at a Buy with a price target of $2,180. Makes sense, per the data.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.