Sign InAMZN Stock Analysis: Strong Growth Potential and Positive News Boost Confidence
Summary
Amazon.com, Inc. (AMZN) closed at $130.36, up 1.92%, and is trading above both its 50-day and 200-day moving averages, indicating a bullish market trend; the stock is potentially undervalued but has a high PE ratio and investors should be cautious of the risks involved. (Analysis date: June 30, 2023).
AMZN Technical Stock Analysis
As of June 30, 2023, Amazon.com, Inc. (ticker: AMZN) closed at $130.36, up 1.92% from its previous close, with a trading volume of 52.87 million shares against an average volume of 62.90 million.
Looking at Amazon's historical pricing, it's touched a year high of $146.57 and a year low of $81.43. By reviewing the moving averages, Amazon currently trades above both the 50-day and 200-day moving averages, at $117.13 and $104.22, respectively, which generally indicates a bullish market trend.
Amazon's Relative Strength Index (RSI), at 67, is approaching the overbought threshold of 70, suggesting the stock may be nearing a peak. Conversely, the MACD (3-month) of 3.63 signals there's potential for upward price momentum.
In terms of valuation, Amazon currently trades at a PE ratio of 303.16, which is considerably high compared to other stocks in the industry, indicating the market has high expectations for future earnings growth.
AMZN Fundamental Stock Analysis
Amazon's market capitalization currently sits at about $1.34 trillion, and it has 10.26 billion outstanding shares. The most recent earnings per share (EPS) was reported at $0.43.
As for future prospects, the discounted cash flow (DCF) is at $135.65, indicating that the stock is potentially undervalued at its current price of $130.36.
Analysts' consensus target price for AMZN is $161.55, with a high estimate of $270 and a low estimate of $97.78, signaling a potential upside.
Considering recent news, there are positive sentiments on Amazon. Strategists at Capital Economics see the potential for significant growth in the AI sector, with businesses like Amazon set to benefit from this trend. Another news report indicates that e-commerce, where Amazon is a market leader, is showing signs of a robust recovery.
Considering the above decisive factors, AMZN shows considerable potential for both short and long-term investment.
Therefore, for the next trading day on July 03, 2023, the stock is expected to maintain its gains, with a potential for growth based on the recent bullish momentum.
On a weekly prediction basis, gauging by technical and fundamental indicators along with recent news, Amazon seems set to strengthen, provided the wider market conditions remain stable.
Based on the current scenario, the stock appears to be a BUY as it shows strong growth prospects according to recent news, alongside bullish technical indicators. Hence, potential investors seeking long-term appreciation might consider this stock. However, due to its high PE ratio, investors should also be aware of the risks involved, especially if the company does not meet the market's high expectations for future earnings growth.
Earnings announcement set on 07/26/2023 would be a crucial event to watch for understanding company's projection and future prospects. Check full Amazon forecast and analysis here.
