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

Zacks Equity Research

Amazon (AMZN) closed at $2,011.60 in the latest trading session, marking a +0.7% move from the prior day. This change outpaced the S&P 500's 0.16% loss on the day. Meanwhile, the Dow lost 0.12%, and the Nasdaq, a tech-heavy index, lost 0.33%.

Prior to today's trading, shares of the online retailer had gained 10.94% over the past month. This has outpaced the Retail-Wholesale sector's loss of 5.75% and the S&P 500's loss of 10.5% in that time.

AMZN will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMZN to post earnings of $6.42 per share. This would mark a year-over-year decline of 9.45%. Meanwhile, our latest consensus estimate is calling for revenue of $73.09 billion, up 22.44% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $27.42 per share and revenue of $335.75 billion. These totals would mark changes of +19.17% and +19.69%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AMZN. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 0.71% lower. AMZN is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AMZN has a Forward P/E ratio of 72.86 right now. For comparison, its industry has an average Forward P/E of 20.26, which means AMZN is trading at a premium to the group.

Investors should also note that AMZN has a PEG ratio of 3.14 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. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.32 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 56, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.