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

In the latest trading session, Amazon (AMZN) closed at $98.04, marking a -0.09% move from the previous day. This change lagged the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq added 0.67%.

Heading into today, shares of the online retailer had gained 4.95% over the past month, outpacing the Retail-Wholesale sector's loss of 1.16% and the S&P 500's gain of 0.25% in that time.

Investors will be hoping for strength from Amazon as it approaches its next earnings release. The company is expected to report EPS of $0.20, down 4.76% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $124.43 billion, up 6.86% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.33 per share and revenue of $556.18 billion. These totals would mark changes of +87.32% and +8.21%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for Amazon. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.4% lower. Amazon is currently a Zacks Rank #3 (Hold).

Digging into valuation, Amazon currently has a Forward P/E ratio of 73.61. This represents a premium compared to its industry's average Forward P/E of 19.16.

Also, we should mention that AMZN has a PEG ratio of 4.06. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Commerce stocks are, on average, holding a PEG ratio of 1.13 based on yesterday's closing prices.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% 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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