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

Zacks Equity Research
·3-min read

In the latest trading session, Amazon (AMZN) closed at $3,242.76, marking a +0.57% move from the previous day. This move outpaced the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 4.81%.

Coming into today, shares of the online retailer had lost 4.63% in the past month. In that same time, the Retail-Wholesale sector lost 4.47%, while the S&P 500 gained 0.64%.

Wall Street will be looking for positivity from Amazon as it approaches its next earnings report date. In that report, analysts expect Amazon to post earnings of $3.90 per share. This would mark a year-over-year decline of 72.32%. Our most recent consensus estimate is calling for quarterly revenue of $137.76 billion, up 9.72% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Amazon. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 3.15% lower. Amazon is currently a Zacks Rank #3 (Hold).

In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 65.11. Its industry sports an average Forward P/E of 33.49, so we one might conclude that Amazon is trading at a premium comparatively.

Investors should also note that AMZN has a PEG ratio of 2.64 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.45 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 182, putting it in the bottom 29% 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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Zacks Investment Research