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Amazon (AMZN) Stock Drops Despite Market Gains: Important Facts to Note

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Amazon (AMZN - Free Report) closed the latest trading day at $153.34, indicating a -0.05% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 0.14%. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq gained 0.16%.

Shares of the online retailer witnessed a gain of 4.34% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 6.73% and the S&P 500's gain of 4.89%.

The upcoming earnings release of Amazon will be of great interest to investors. On that day, Amazon is projected to report earnings of $0.79 per share, which would represent year-over-year growth of 276.19%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $166.12 billion, up 11.34% from the year-ago period.

AMZN's full-year Zacks Consensus Estimates are calling for earnings of $2.69 per share and revenue of $570.95 billion. These results would represent year-over-year changes of +278.87% and +11.08%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Amazon. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.84% upward. Amazon is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 57.04. For comparison, its industry has an average Forward P/E of 20.13, which means Amazon is trading at a premium to the group.

One should further note that AMZN currently holds a PEG ratio of 2. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 0.63.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 38, which puts it in the top 16% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. 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.


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