Amazon.com (AMZN) stock is plummeting Friday after the world's largest e-commerce company reported mixed earnings results for its second quarter and issued a third-quarter outlook that came up short of analysts' estimates.
In the three months ended June 30, Amazon's revenue increased 10% year-over-year to $148 billion, driven by a 19% year-over-year rise in its Amazon Web Services (AWS) cloud segment to $26.3 billion. The company said earnings per share (EPS) nearly doubled from the year-ago period to $1.26.
"We're continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth," Amazon CEO Andy Jassy said in a statement.
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While Amazon's results for AWS revenue and earnings per share came in above the $26 billion and $1.03 analysts were expecting, respectively, total revenue fell short of the $148.6 billion Wall Street forecast, according to CNBC.
For the third quarter, Amazon said it anticipates revenue in the range of $154 billion to $158.5 billion, representing growth of 8% to 11% from the same period a year ago. However, the midpoint of this range, $156.25 billion, is lower than analysts' estimates for $158.24 billion in sales.
Is Amazon stock a buy, sell or hold?
Wall Street is bullish on the Dow Jones stock, and for good reason. Heading into today's session, Amazon was up 21% for the year to date, building on its impressive 20-year return.
According to S&P Global Market Intelligence, the average analyst target price for AMZN stock is $221.92, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is Strong Buy.
Financial services firm Wedbush is one of the more bullish outfits on AMZN stock with an Outperform rating (equivalent to a Buy) and $225 price target.
"Despite a mixed backdrop near-term, we would be buyers of the pullback in Amazon shares following Q2 results," said Wedbush analyst Scott Devitt in a note Friday morning. "Our long-term thesis is unchanged, Amazon is positioned to deliver sustainable operating margin growth over a multi-year period that exceeds mega-cap peers including Meta (Outperform-rated) and Alphabet (Outperform-rated)."
Devitt adds that “Amazon remains our Best Idea."
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FAQs
Amazon AMZN has seen its stock plunge 19.1% in the past month. This drop is wider than the 15.3% and 7.4% declines of the Zacks Internet-Commerce industry and the S&P 500, respectively. The AMZN stock has taken a sharp downturn, which can be primarily attributed to its lower-than-expected second-quarter 2024 revenues.
What do analysts say about Amazon stock? ›
Amazon has a consensus rating of Strong Buy which is based on 42 buy ratings, 1 hold ratings and 0 sell ratings. The average price target for Amazon is $222.88. This is based on 43 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Does Amazon have a good PE ratio? ›
AMZN PE ratio history
Over the last nine years, the average PE ratio of Amazon Com has been 142.63. The current 42.05 price-to-earnings ratio is 71% less than the historical average.
Why is Amazon stock risky? ›
The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: - changes in interest rates;- conditions or trends in the internet and the industry segments we operate in;- quarterly variations in operating results;- ...
Why is Amazon stock crashing so much? ›
Amazon shares tumbled on Friday, a day after the company reported a revenue miss and disappointing guidance for the second quarter. The company is navigating slower sales in its core retail business, and said the chaotic news cycle was partly to blame for its weak forecast.
Is Amazon a buy or sell right now? ›
Amazon stock has received a consensus rating of buy. The average rating score is A1 and is based on 98 buy ratings, 2 hold ratings, and 0 sell ratings.
What is a good price for AMZN? ›
Stock Price Target AMZN
| High | $265.00 |
|---|
| Median | $220.00 |
| Low | $180.00 |
| Average | $220.34 |
| Current Price | $171.39 |
The market expects Amazon (AMZN) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024.
What will Amazon stock be worth in 5 years? ›
Of the 47 analysts who recommended Amazon in June, 44 rated it a buy or a strong buy. Forecasters predict that Amazon will reach $200 per share a year from now and will continue to rise to $250 per share at the end of 2026. In 2027, the prediction is for a price of $300, and $250 by the end of 2028.
What PE ratio is a good buy? ›
Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.
Amazon PE ratio as of September 13, 2024 is 43.72.
The price to earnings ratio is calculated by taking the latest closing price and dividing it by the most recent earnings per share (EPS) number.
Is Amazon share overvalued? ›
The intrinsic value of one AMZN stock under the Base Case scenario is 133.14 USD. Compared to the current market price of 171.93 USD, Amazon.com Inc is Overvalued by 23%.
Is Amazon stock worth keeping? ›
Fair Value Estimate for Amazon Stock
With its 4-star rating, we believe Amazon's stock is undervalued compared with our long-term fair value estimate of $195 per share, which implies a 2024 enterprise value to sales multiple of 3 times and a 2% free cash flow yield.
Why is Amazon not a good investment? ›
If these bullish expectations are not met, Amazon's stock will likely depreciate because the market has already assumed future performance will be strong. This speculation further compounds risk by making Amazon's stock price highly volatile, disproportionately exposing investors to market fluctuations.
How safe is it to invest in Amazon? ›
Of the 64 Amazon stock analysts following the company, 95% have a buy rating, according to FactSet.
Why does Amazon destroy stock? ›
The most common reason for destruction is inadequate or unsafe inventory. Sellers must ensure that their inventory meets Amazon's safety and quality standards before sending it in. Additionally, Amazon may destroy inventory if it is overstocked, damaged, or returned in an unacceptable condition.
What is Amazon stock price prediction for 2024? ›
While 39 see it as a 'Buy' and one a 'Strong Buy,' one has it down as a 'Hold'. Their consensus one-year Amazon stock forecast 2024/2025 is for the price to hit $221.69, which is 24.39% higher than the $178.88 closing price on August 20, 2024. The highest prediction was $251 and the lowest was just $160.
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