Sign InAmazon Stock Shows Short-Term Bearish Trends but Long-Term Undervaluation Sparks Buying Interest
Summary
On March 14, 2025, Amazon.com, Inc. saw a slight increase in stock price amidst short-term bearish signals, yet analysts highlight potential undervaluation and strong long-term growth prospects, suggesting a cautious optimism for investors.
Technical Analysis
Amazon.com, Inc. (AMZN) closed on March 14, 2025, at $197.95, an increase of 2.09% from the previous trading session. The stock has shown recent volatility, evidenced by its Average True Range (ATR) of 3.47. The closing price remains below both the 50-day moving average of $221.40 and the 200-day moving average of $199.38, signaling potential bearish sentiment in the short term. However, the Relative Strength Index (RSI14) is at 35, which is nearing the oversold territory, indicating a possible buying opportunity in the near term.
The trading volume of 36.63 million was slightly below the average of 38.56 million, suggesting reduced activity or interest in the stock. The stock's movement has encountered intraday support at $196.59, with a key resistance level at $224.92. The Moving Average Convergence Divergence (MACD) is at -12.33, further indicating a bearish trend over the last three months.
Fundamental Analysis
On a fundamental level, Amazon's current P/E ratio of 35.86 is relatively attractive compared to its historical average, especially given that its market cap stands at $2.10 trillion. The company is still a growth powerhouse, with an EPS (TTM) of 5.52 and upcoming earnings announcement on April 29, 2025. Despite market-wide corrections, one analyst notes that the stock is near its cheapest P/E valuation historically, suggesting that current prices may offer an undervalued entry point.
The discounted cash flow (DCF) analysis yields a figure of $21.65, which is notably disconnected from current market prices. This may reflect a more conservative estimation of future cash flows or adjustments in recent market conditions. The consensus price target range of $210 to $270 and a consensus target of $244.53 suggest that analysts foresee potential upside from current levels.
Intrinsic Value and Investment Potential
Amazon's long-term investment potential remains robust due to its leadership position in ecommerce and cloud computing, sectors poised for continued growth. With market volatility and the ongoing tech sector sell-off, Amazon could potentially be a "buy the dip" candidate, supported by strong historical performance and analyst confidence.
News and Market Sentiment
Recent news highlights that Amazon's stock is viewed as underpriced by an analyst who predicts a potential upside of over 50%. Another article contends with the broader market downturn and identifies Amazon as a strong buy candidate in a volatile environment. These assessments underscore a favorable long-term outlook amidst short-term market turbulence.
Overall Evaluation: Hold
Amazon is classified as a 'Hold' candidate in the immediate term due to the technical signals and current price positioning. Short-term bearish trends and proximity to support levels warrant cautious optimism. However, in the long term, the fundamental strength and potential undervaluation present a promising outlook. Investors might consider keeping a watchful eye on Amazon's subsequent earnings report and broader market conditions for signs of renewed upward momentum.
