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

Zacks Equity Research
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Amazon (AMZN) closed the most recent trading day at $1,819.85, moving +1.26% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 0.84%, while the tech-heavy Nasdaq added 1.42%.

Prior to today's trading, shares of the online retailer had gained 10.8% over the past month. This has outpaced the Retail-Wholesale sector's gain of 3.02% and the S&P 500's gain of 1.18% in that time.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. On that day, AMZN is projected to report earnings of $4.67 per share, which would represent year-over-year growth of 42.81%. Meanwhile, our latest consensus estimate is calling for revenue of $59.59 billion, up 16.75% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $26.93 per share and revenue of $275.58 billion, which would represent changes of +33.71% and +18.33%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for AMZN. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.74% higher. AMZN currently has a Zacks Rank of #3 (Hold).

Digging into valuation, AMZN currently has a Forward P/E ratio of 66.75. This represents a premium compared to its industry's average Forward P/E of 28.81.

It is also worth noting that AMZN currently has a PEG ratio of 2.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Commerce stocks are, on average, holding a PEG ratio of 2.12 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 204, putting it in the bottom 20% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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