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Amazon.com, Inc. (AMZN) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Amazon (AMZN - Free Report) ? Shares have been on the move with the stock up 3.9% over the past month. The stock hit a new 52-week high of $149.46 in the previous session. Amazon has gained 77.2% since the start of the year compared to the 25% move for the Zacks Retail-Wholesale sector and the 51.2% return for the Zacks Internet - Commerce industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Amazon reported EPS of $0.85 versus consensus estimate of $0.58 while it beat the consensus revenue estimate by 1.1%.
For the current fiscal year, Amazon is expected to post earnings of $2.67 per share on $570.75 billion in revenues. This represents a 276.06% change in EPS on a 11.04% change in revenues. For the next fiscal year, the company is expected to earn $3.53 per share on $637.34 billion in revenues. This represents a year-over-year change of 31.98% and 11.67%, respectively.
Valuation Metrics
Amazon may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Amazon has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 55.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 21.8X. On a trailing cash flow basis, the stock currently trades at 31X versus its peer group's average of 17X. Additionally, the stock has a PEG ratio of 1.95. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Amazon currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Amazon meets the list of requirements. Thus, it seems as though Amazon shares could still be poised for more gains ahead.
How Does AMZN Stack Up to the Competition?
Shares of AMZN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is PDD Holdings Inc. (PDD - Free Report) . PDD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. PDD Holdings Inc. beat our consensus estimate by 26.02%, and for the current fiscal year, PDD is expected to post earnings of $6.96 per share on revenue of $33.77 billion.
Shares of PDD Holdings Inc. have gained 28% over the past month, and currently trade at a forward P/E of 25.72X and a P/CF of 38.57X.
The Internet - Commerce industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMZN and PDD, even beyond their own solid fundamental situation.
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Amazon.com, Inc. (AMZN) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Amazon (AMZN - Free Report) ? Shares have been on the move with the stock up 3.9% over the past month. The stock hit a new 52-week high of $149.46 in the previous session. Amazon has gained 77.2% since the start of the year compared to the 25% move for the Zacks Retail-Wholesale sector and the 51.2% return for the Zacks Internet - Commerce industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 26, 2023, Amazon reported EPS of $0.85 versus consensus estimate of $0.58 while it beat the consensus revenue estimate by 1.1%.
For the current fiscal year, Amazon is expected to post earnings of $2.67 per share on $570.75 billion in revenues. This represents a 276.06% change in EPS on a 11.04% change in revenues. For the next fiscal year, the company is expected to earn $3.53 per share on $637.34 billion in revenues. This represents a year-over-year change of 31.98% and 11.67%, respectively.
Valuation Metrics
Amazon may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Amazon has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 55.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 21.8X. On a trailing cash flow basis, the stock currently trades at 31X versus its peer group's average of 17X. Additionally, the stock has a PEG ratio of 1.95. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Amazon currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Amazon meets the list of requirements. Thus, it seems as though Amazon shares could still be poised for more gains ahead.
How Does AMZN Stack Up to the Competition?
Shares of AMZN have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is PDD Holdings Inc. (PDD - Free Report) . PDD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. PDD Holdings Inc. beat our consensus estimate by 26.02%, and for the current fiscal year, PDD is expected to post earnings of $6.96 per share on revenue of $33.77 billion.
Shares of PDD Holdings Inc. have gained 28% over the past month, and currently trade at a forward P/E of 25.72X and a P/CF of 38.57X.
The Internet - Commerce industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for AMZN and PDD, even beyond their own solid fundamental situation.