Amazon (AMZN) Stock Sinks As Market Gains: What You Should Know

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Amazon (AMZN) Stock Sinks As Market Gains: What You Should Know


In the latest trading session, Amazon (AMZN) closed at $1,524.63, marking a -0.93% move from the previous day. This change lagged the S&P 500's 1.29% gain on the day. Elsewhere, the Dow gained 1.55%, while the tech-heavy Nasdaq added 1.27%.

Wall Street will be looking for positivity from AMZN as it approaches its next earnings report date. This is expected to be February 7, 2019. The company is expected to report EPS of $5.74, up 165.74% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $71.49 billion, up 18.25% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $18.68 per share and revenue of $233.59 billion. These totals would mark changes of +310.55% and +31.33%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AMZN. Recent revisions tend to reflect the latest 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 5.09% higher. AMZN is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, AMZN is holding a Forward P/E ratio of 86.43. This represents a premium compared to its industry's average Forward P/E of 37.65.

Investors should also note that AMZN has a PEG ratio of 3.2 right now. 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 was holding an average PEG ratio of 2.36 at yesterday's closing price.

The Internet – Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 103, putting it in the top 40% 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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