Amazon (AMZN) - Analysis Shows Strong Growth Potential and UndervaluationStockInvest.us, 2 months ago
Amazon.com, Inc. (AMZN) - Technical Analysis
Amazon.com, Inc. (AMZN) closed in the latest trading session at $144.72, reflecting a marginal change of -0.09% from the previous day. The volume of shares traded at 63.33 million, was higher than the average volume of 53.37 million. The company's market capitalization is currently around $1.49 trillion.
The 50-day moving average stands at $134.37, while the 200-day moving average is $110.71. Currently, Amazon's RSI14 is at 78, indicating the stock is close to the overbought territory. Meanwhile, the ATR (Average True Range) is 2.25, which indicates moderate volatility. The MACD, a trend-following momentum indicator, is -0.035335, suggesting a stable trend.
The stock has a support level at $139.57, and a resistance level close to its current high at $144.85. As a measure of risk management, there's a stop-loss set at $141.14. If the stock price of Amazon drops below this level, a trader may want to consider selling.
Amazon.com, Inc. (AMZN) - Fundamental Analysis
Amazon's last reported earnings per share (EPS) were $1.24, giving it a relatively high price-to-earnings (PE) ratio of 116.71 compared to the industry average. This high valuation is likely a reflection of the company's growing dominance in e-commerce and cloud computing.
Contained in the data is a discounted cash flow (DCF) valuation of $150.01 for Amazon's stock. This valuation model suggests the stock could be undervalued. Market consensus target price is at $165.22 with a median target price of $162, indicating that the majority of analysts still see an upside potential for the stock.
There is a "strong buy" sentiment amongst financial pundits with 37 recommending a "buy," while 3 have suggested to "hold." This consensus aligns with recent news which highlights Amazon's undervaluation and hints at an impressive growth. The company's new initiatives, such as the expansion of its logistics network, the addition of a new board member with healthcare expertise, and the focus on shipping services for online merchants, are expected to contribute to a long-term growth with an expected 11% revenue CAGR.
Amazon.com Stock - Short-term and Long-term Predictions
Considering the technical and fundamental aspects of Amazon's stock, the following are the predictions. For the next trading day on September 15, 2023, the stock is likely to hover around the resistance level of $144.85 due to the high RSI and buying consensus.
In the long term, within the upcoming week, Amazon's stock is expected to rise. Considering the DCF value and the consensus target price, the stock may be heading towards the $150-$165 range. As these predictions greatly depend on the company's earnings announcement on 10/25/2023, the numbers could indeed swing in either direction.
Considering the aforementioned analysis, Amazon.com, Inc. (AMZN) receives a "Buy" recommendation. Despite trading at a high earnings multiples, the sheer growth potential of the company, the undervaluation according to DCF model, and the bullish consensus from analysts underscore this final positioning. Furthermore, the recent news around the operations expansion and strategic initiatives, along with healthy technical indicators, collectively strengthen the optimistic outlook. However, investors must monitor the news and market fluctuations continuously for any changes.