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Amazon (AMZN - Free Report) is a Zacks Rank #5 (Strong Sell) after missing earnings in late October. The November retail sales report came in awfully weak so it is not surprising to see analysts taking down estimates of select consumer goods names. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe.
Its online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish footprint in physical grocery supermarket space.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of AMZN, I obe beat of the Zacks Consensus Estimate and three misses. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For AMZN I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from a loss of $0.09 to a loss of $0.12 over the last 60 days.
The next year has moved from $1.70 to $1.56. That move lower is probably the biggest deciding factor for this stock to be a Zacks Rank #5 (Strong Sell).
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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Bear Of The Day: Amazon (AMZN)
Amazon (AMZN - Free Report) is a Zacks Rank #5 (Strong Sell) after missing earnings in late October. The November retail sales report came in awfully weak so it is not surprising to see analysts taking down estimates of select consumer goods names. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe.
Its online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish footprint in physical grocery supermarket space.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of AMZN, I obe beat of the Zacks Consensus Estimate and three misses. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For AMZN I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from a loss of $0.09 to a loss of $0.12 over the last 60 days.
The next year has moved from $1.70 to $1.56. That move lower is probably the biggest deciding factor for this stock to be a Zacks Rank #5 (Strong Sell).
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).