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Amazon (AMZN) Gains But Lags Market: What You Should Know

Amazon (AMZN) closed at $3,401.80 in the latest trading session, marking a +0.05% move from the prior day. This change lagged the S&P 500's 0.67% gain on the day. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.61%.

Prior to today's trading, shares of the online retailer had gained 11.41% over the past month. This has outpaced the Retail-Wholesale sector's gain of 10.42% and the S&P 500's gain of 7.78% in that time.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. The company is expected to report EPS of $7.50, up 77.3% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $92.57 billion, up 32.28% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $32 per share and revenue of $368.35 billion, which would represent changes of +39.07% and +31.31%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AMZN. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. Within the past 30 days, our consensus EPS projection has moved 59.04% higher. AMZN is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AMZN has a Forward P/E ratio of 106.26 right now. This represents a premium compared to its industry's average Forward P/E of 52.4.

We can also see that AMZN currently has a PEG ratio of 3.53. 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 3.53 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 75, putting it in the top 30% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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