Amazon (AMZN) Sees a More Significant Dip Than Broader Market: Some Facts to Know

Amazon (AMZN) closed at $184.30 in the latest trading session, marking a -0.38% move from the prior day. Read More...

In the latest trading session, Amazon (AMZN) closed at $184.30, marking a -0.38% move from the previous day. This change lagged the S&P 500’s 0.11% loss on the day. Meanwhile, the Dow experienced a drop of 0.22%, and the technology-dominated Nasdaq saw a decrease of 0.23%.

Shares of the online retailer have depreciated by 2.37% over the course of the past month, underperforming the Retail-Wholesale sector’s gain of 0.18% and the S&P 500’s gain of 3.51%.

The upcoming earnings release of Amazon will be of great interest to investors. The company is expected to report EPS of $1.02, up 61.9% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $148.54 billion, indicating a 10.54% growth compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.58 per share and revenue of $638.24 billion. These totals would mark changes of +57.93% and +11.04%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Amazon. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the company’s business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.96% upward. Currently, Amazon is carrying a Zacks Rank of #3 (Hold).

Looking at its valuation, Amazon is holding a Forward P/E ratio of 40.38. This denotes a premium relative to the industry’s average Forward P/E of 21.34.

Also, we should mention that AMZN has a PEG ratio of 1.36. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. As the market closed yesterday, the Internet – Commerce industry was having an average PEG ratio of 0.95.

The Internet – Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 71, this industry ranks in the top 29% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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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