Amazon.com, Inc. (AMZN) Is a Trending Stock: Facts to Know Before Betting on It

01.03.24 15:00 Uhr

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Amazon (AMZN) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this online retailer have returned +11% over the past month versus the Zacks S&P 500 composite's +5.2% change. The Zacks Internet - Commerce industry, to which Amazon belongs, has gained 11.1% over this period. Now the key question is: Where could the stock be headed in the near term?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.For the current quarter, Amazon is expected to post earnings of $0.81 per share, indicating a change of +161.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +18.1% over the last 30 days.The consensus earnings estimate of $4.06 for the current fiscal year indicates a year-over-year change of +40%. This estimate has changed +10.8% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $5.30 indicates a change of +30.5% from what Amazon is expected to report a year ago. Over the past month, the estimate has changed +10%.Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Amazon is rated Zacks Rank #1 (Strong Buy).The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.In the case of Amazon, the consensus sales estimate of $142.39 billion for the current quarter points to a year-over-year change of +11.8%. The $641.11 billion and $715.33 billion estimates for the current and next fiscal years indicate changes of +11.5% and +11.6%, respectively.Last Reported Results and Surprise HistoryAmazon reported revenues of $169.96 billion in the last reported quarter, representing a year-over-year change of +13.9%. EPS of $1.01 for the same period compares with $0.21 a year ago.Compared to the Zacks Consensus Estimate of $166.26 billion, the reported revenues represent a surprise of +2.23%. The EPS surprise was +24.69%.The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Amazon is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Amazon. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks

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Quelle: Zacks

Nachrichten zu Amazon

Analysen zu Amazon

DatumRatingAnalyst
11.04.2024Amazon BuyJefferies & Company Inc.
08.04.2024Amazon OutperformRBC Capital Markets
04.04.2024Amazon BuyJefferies & Company Inc.
02.04.2024Amazon BuyJefferies & Company Inc.
28.03.2024Amazon BuyJefferies & Company Inc.
DatumRatingAnalyst
11.04.2024Amazon BuyJefferies & Company Inc.
08.04.2024Amazon OutperformRBC Capital Markets
04.04.2024Amazon BuyJefferies & Company Inc.
02.04.2024Amazon BuyJefferies & Company Inc.
28.03.2024Amazon BuyJefferies & Company Inc.
DatumRatingAnalyst
26.09.2018Amazon HoldMorningstar
30.07.2018Amazon neutralJMP Securities LLC
13.06.2018Amazon HoldMorningstar
02.05.2018Amazon HoldMorningstar
02.02.2018Amazon neutralJMP Securities LLC
DatumRatingAnalyst
11.04.2017Whole Foods Market SellStandpoint Research
23.03.2017Whole Foods Market SellUBS AG
14.08.2015Whole Foods Market SellPivotal Research Group
04.02.2009Amazon.com sellStanford Financial Group, Inc.
26.11.2008Amazon.com ErsteinschätzungStanford Financial Group, Inc.

Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Amazon nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen

Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
Sell: Verkaufsempfehlungn wie z.B. "verkaufen" oder "reduce"