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Amazon (AMZN) one of the “Magnificent 7” megacap tech stocks, has been an enduring leader in both e-commerce and cloud computing.
However, alongside general market malaise, Amazon shares are down nearly 17% for the year, fueling investor arguments on whether this reset is an attractive long-term buying point.
Even with the recent setback, Amazon’s underpinnings and long-term growth drivers are solid. The stock is turning around its April lows, and near-term catalysts, such as its April 29 earnings release, could spark bullish interest. In the meantime, high conviction among analysts underpins the stock’s long-term thesis.
About Amazon Stock
Amazon (AMZN) is an international leader in e-commerce, cloud computing (through AWS), internet advertising, and logistics. Based in Seattle, Washington, it has a market cap of $1.92 trillion and is part of the S&P 500 ($SPX) and Nasdaq-100 ($IUXX) indexes.
For the past 52 weeks, Amazon stock has had a high-low range of $151.61 to $242.52 and is currently trading around $185, down approximately 17% in the year to date. That underperformance is against the backdrop of the S&P 500 Index (SPY) falling about 8.7% in the same period.
Despite this, the stock remains the highest-rated “Magnificent 7” stock by analysts, as tracked by Barchart.
Amazon’s forward price-earnings ratio is 30.44x, while its price-sales ratio sits at 3.17x. Compared to the other Magnificent 7 names, AMZN’s valuation appears reasonable, given its historical earnings growth and robust cash flow. The company has a PEG ratio of 1.33x and trades at a forward P/E below Microsoft (MSFT), positioning it as a growth at a reasonable price (GARP) opportunity.
Amazon Beats on Earnings Again
Amazon posted another quarter of earnings outperformance for Q4 2024, reporting EPS of $1.86 versus consensus estimates of $1.52. That 22.4% earnings beat marked its fourth consecutive upside surprise, with the company exceeding estimates by as much as 36% in Q1 2024.
These consistent beats reflect Amazon’s ability to leverage growth in high-margin areas like AWS and advertising while maintaining cost discipline across its sprawling retail and logistics footprint. Its earnings momentum is particularly noteworthy in a volatile tech environment where margin pressures are widespread.
Looking ahead, expectations for the upcoming Q1 2025 earnings release, scheduled for April 29, remain elevated but reflect caution. The average EPS estimate is $1.37, with a range between $1.12 and $1.62, pointing to potential volatility around cost trends and AWS performance. For Q2 2025, the average estimate climbs to $1.39, suggesting continued sequential growth.
With Amazon’s strong track record of earnings surprises and improving profitability, the upcoming report could be a pivotal moment for sentiment following the stock’s recent weakness.
What Do Analysts Expect for Amazon Stock?
Amazon maintains one of the strongest analyst ratings profiles in the market. The current consensus rating is “Strong Buy” with a score of 4.89, based on input from 53 analysts. This rating has barely wavered over the past three months, underscoring consistent confidence in Amazon’s long-term strategy.
The ratings breakdown includes 48 “Strong Buy” recommendations, four “Moderate Buy,” and just 1 “Hold” recommendation, reflecting wide institutional support.
The mean price target from analysts sits well above current levels, implying more than 40% upside potential from the current price. Amazon may be poised for a re-rating if upcoming earnings continue to outperform.
