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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 $186.33, indicating a -0.87% change from the previous session's end. This change lagged the S&P 500's daily gain of 0.42%. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq gained 0.38%.

The online retailer's stock has climbed by 5.31% in the past month, falling short of the Retail-Wholesale sector's gain of 6.34% and outpacing the S&P 500's gain of 2.06%.

The upcoming earnings release of Amazon will be of great interest to investors. On that day, Amazon is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 34.12%. Alongside, our most recent consensus estimate is anticipating revenue of $157.05 billion, indicating a 9.76% upward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.74 per share and a revenue of $634.49 billion, signifying shifts of +63.45% and +10.39%, respectively, from the last year.

Investors should also take note of any recent adjustments to analyst estimates for Amazon. These recent revisions tend to reflect the evolving nature of short-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 utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.2% lower. Amazon presently features a Zacks Rank of #3 (Hold).

Digging into valuation, Amazon currently has a Forward P/E ratio of 39.62. This signifies a premium in comparison to the average Forward P/E of 22.6 for its industry.

One should further note that AMZN currently holds a PEG ratio of 1.45. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Commerce industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 57, finds itself in the top 23% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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