Taking on analysts’ expectations and winning: Amazon.com Inc. (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) stock jumped 5.37% on Friday to $120.97 against a previous-day closing price of $114.81. With 61.25 million shares changed hands, the volume of the stock remained lighter than its average volume of 89.24 million shares. During the session, the Internet Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $121.90 whereas the lowest price it dropped to was $117.17. The 52-week range on AMZN shows that it touched its highest point at $188.11 and its lowest point at $101.26 during that stretch. It currently has a 1-year price target of $170.43. Beta for the stock currently stands at 1.28.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AMZN was down-trending over the past week, with a drop of -1.47%, but this was up by 6.85% over a month. Three-month performance dropped to -13.22% while six-month performance fell -13.58%. The stock lost -33.28% in the past year, while it has lost -27.44% so far this year. A look at the trailing 12-month EPS for AMZN yields 2.07 with Next year EPS estimates of 2.54. For the next quarter, that number is 0.14. This implies an EPS growth rate of 54.90% for this year and 300.63% for next year. EPS is expected to grow by 33.25% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 67.60%.

Float and Shares Shorts:

At present, 10.18 billion AMZN shares are outstanding with a float of 457.72 million shares on hand for trading. On Apr 28, 2022, short shares totaled 3.94 million, which was 0.77% higher than short shares on Mar 30, 2022. In addition to Mr. Andrew R. Jassy as the firm’s Pres, CEO & Director, Mr. Brian T. Olsavsky serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 60.52% of AMZN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 33.02% of AMZN, in contrast to 27.37% held by mutual funds. Shares owned by individuals account for 0.54%. As the largest shareholder in AMZN with 6.33% of the stake, The Vanguard Group, Inc. holds 643,729,300 shares worth 643,729,300. A second-largest stockholder of AMZN, BlackRock Fund Advisors, holds 368,439,540 shares, controlling over 3.62% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in AMZN, holding 331,860,020 shares or 3.26% stake. With a 2.51% stake in AMZN, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 254,987,160 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 1.90% of AMZN stock, is the second-largest Mutual Fund holder. It holds 193,671,200 shares valued at 20.57 billion. SPDR S&P 500 ETF Trust holds 0.93% of the stake in AMZN, owning 94,507,353 shares worth 10.04 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AMZN since 52 analysts follow the stock currently. There are 42 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 6 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AMZN analysts setting a high price target of $210.00 and a low target of $104.00, the average target price over the next 12 months is $166.99. Based on these targets, AMZN could surge 73.6% to reach the target high and fall by -14.03% to reach the target low. Reaching the average price target will result in a growth of 38.04% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AMZN will report FY 2022 earnings on 02/02/2023. Analysts have provided yearly estimates in a range of $1.59 being high and -$0.40 being low. For AMZN, this leads to a yearly average estimate of $0.60. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Amazon.com Inc. surprised analysts by -$0.80 when it reported -$0.38 EPS against a consensus estimate of $0.42. The surprise factor in the prior quarter was $1.21. Based on analyst estimates, the high estimate for the next quarter is $0.41 and the low estimate is -$0.14. The average estimate for the next quarter is thus $0.12.

Summary of Insider Activity:

Insiders traded AMZN stock several times over the past three months with 12 Buys and 11 Sells. In these transactions, 11,906 shares were bought while 77,553 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 356 over the past year. The total number of shares bought during that period was 38,557 while 1,322,644 shares were sold.

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