Amazon (AMZN) Stock Declines While Market Improves: Some Information for Investors

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a day ago

Amazon (AMZN) closed the most recent trading day at $219.39, moving -1.75% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.52%. At the same time, the Dow added 0.63%, and the tech-heavy Nasdaq gained 0.48%.
The online retailer's shares have seen an increase of 8.92% over the last month, surpassing the Retail-Wholesale sector's gain of 2.65% and the S&P 500's gain of 4.27%.
The investment community will be paying close attention to the earnings performance of Amazon in its upcoming release. On that day, Amazon is projected to report earnings of $1.31 per share, which would represent year-over-year growth of 6.5%. At the same time, our most recent consensus estimate is projecting a revenue of $161.79 billion, reflecting a 9.33% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $6.22 per share and revenue of $694.13 billion, which would represent changes of +12.48% and +8.8%, respectively, from the prior year.
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 business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.47% increase. At present, Amazon boasts a Zacks Rank of #3 (Hold).
Looking at valuation, Amazon is presently trading at a Forward P/E ratio of 35.92. This indicates a premium in contrast to its industry's Forward P/E of 24.95.
One should further note that AMZN currently holds a PEG ratio of 1.68. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.41.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 58, finds itself in the top 24% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
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