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

Amazon (AMZN) closed the most recent trading day at $123.43, moving -0.66% from the previous trading session. This change lagged the S&P 500's daily gain of 0.12%. Elsewhere, the Dow gained 0.13%, while the tech-heavy Nasdaq lost 4.09%.

Coming into today, shares of the online retailer had gained 10.76% in the past month. In that same time, the Retail-Wholesale sector gained 4.5%, while the S&P 500 gained 3.98%.

Amazon will be looking to display strength as it nears its next earnings release. On that day, Amazon is projected to report earnings of $0.34 per share, which would represent year-over-year growth of 240%. Our most recent consensus estimate is calling for quarterly revenue of $131.51 billion, up 8.47% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.56 per share and revenue of $560.37 billion, which would represent changes of +119.72% and +9.02%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for Amazon. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 past month, the Zacks Consensus EPS estimate has moved 1.3% higher. Amazon is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Amazon has a Forward P/E ratio of 79.47 right now. For comparison, its industry has an average Forward P/E of 19.3, which means Amazon is trading at a premium to the group.

We can also see that AMZN currently has a PEG ratio of 2.42. 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. AMZN's industry had an average PEG ratio of 0.99 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 68, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

To follow AMZN in the coming trading sessions, be sure to utilize Zacks.com.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

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