Trade-Ideas: Amazon.com (AMZN) Is Today's Post-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Amazon.com ( AMZN) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Amazon.com as such a stock due to the following factors:

  • AMZN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $802.3 million.
  • AMZN is down 5.7% today from today's close.

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More details on AMZN:

Amazon.com, Inc. operates as an online retailer in North America and internationally. The company operates in two segments, North America and International. Currently there are 25 analysts that rate Amazon.com a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Amazon.com has been 2.9 million shares per day over the past 30 days. Amazon.com has a market cap of $137.1 billion and is part of the services sector and retail industry. The stock has a beta of 0.64 and a short float of 1.9% with 2.65 days to cover. Shares are up 20% year to date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Amazon.com as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, AMZN's share price has jumped by 39.83%, exceeding the performance of the broader market during that same time frame. Although AMZN had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • AMZN's revenue growth trails the industry average of 36.7%. Since the same quarter one year prior, revenues rose by 21.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 36.9% when compared to the same quarter one year ago, falling from $130.00 million to $82.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, AMAZON.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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