Zacks Equity Research
3 min read
Amazon (AMZN) closed at $247.04 in the latest trading session, marking a +1.4% move from the prior day. The stock’s change was more than the S&P 500’s daily gain of 0.81%. On the other hand, the Dow registered a gain of 0.27%, and the technology-centric Nasdaq increased by 1.3%.
Prior to today’s trading, shares of the online retailer had gained 2.36% outpaced the Retail-Wholesale sector’s gain of 0.24% and the S&P 500’s gain of 1.13%.
Market participants will be closely following the financial results of Amazon in its upcoming release. The company is predicted to post an EPS of $1.82, indicating a 8.33% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $196.9 billion, reflecting a 17.41% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.86 per share and a revenue of $826.36 billion, representing changes of +23.57% and +15.26%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Amazon. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.39% higher within the past month. Amazon is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 27.48. Its industry sports an average Forward P/E of 16.7, so one might conclude that Amazon is trading at a premium comparatively.
Investors should also note that AMZN has a PEG ratio of 1.59 right now. 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 1.04.
The Internet – Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 24% of all 250+ industries.
