Is Amazon.com, Inc. (AMZN) Becoming More Panic-Prone?

Undoubtedly, Amazon.com, Inc. (NASDAQ:AMZN) has been one of the most volatile stocks in the market in recent times, and the way it handled Tuesday’s volatility suggests the stock may be poised to rise heading into short-terms. The shares accumulated 47.01 points or 2.95 percent at $1638.01 with a light trade volume of 4.824 million shares. After opening the session at $1604, the shares went as high as $1639.395 and as low as $1598.88, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $818 billion and now has 499.29 million shares outstanding. Amazon.com, Inc. (AMZN) stock has lost -0.16 percent of market value in 21 trading days.

AMZN stock has a trailing 3-year beta of 1.68, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $19.83 a share in the trailing twelve months. The stock’s value has surged 9.06 percent year to date (YTD) against a rise of 22.28 percent in 12 month’s time. The company’s shares still trade -20.12 percent away from its 1-year high of $2050.50 and 25.33 percent up from 52-week low of $1307.00. The average consensus rating on the company is 1.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Amazon.com, Inc. (AMZN) will probably climb 29.37 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $2450 price as 12-month high target. This represents a whopping 49.57 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $2100, which represents a return potential of 28.2 percent when compared to the closing price of the stock of $1638.01 on Tuesday, February 12. The lowest price target for the stock is $1800 — slightly more than 9.89 percent from AMZN’s current share price.

History has shown that shares in Amazon.com, Inc. have gone up on 19 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings. Investors will get their next glimpse of AMZN’s Q1 earnings on April 25. Analysts are forecasting revenue to climb 19.1 percent to $60.8B in the fiscal first quarter, while earnings are seen soaring by nearly 36.09 percent to $4.45 per share. It earned $6.04 per share, better than the $5.68, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $72.4B, better than the $71.9B analysts expected. Earnings are estimated to increase by 335.7 percent this year, 45.18 percent next year and continue to increase by 43.81 percent annually for the next 5 years.

Let’s take a look at some insider activity at Amazon.com, Inc. (NASDAQ:AMZN) and see the pattern. The earliest insider trade took place on 11/20/2018. Wilke Jeffrey A parted with a total of 1.23 thousand shares of company at average share price of $1506.94. The total for the sales was set at $1.85 million. After this transaction, the CEO Worldwide Consumer account balance stood at 61.81 thousand shares. The stock grew 8.7 percent since that insider sale. On 11/19/2018, Wilke Jeffrey A, CEO Worldwide Consumer, sold 1.65 thousand shares at a price per share of $1527.97. This removed 2.51 million shares from the insider’s fortune and the stock saw a 7.2 percent rally in value since the news became public. This transaction left 63.04 thousand shares in the CEO Worldwide Consumer account.

On 11/15/2018, Director Huttenlocher Daniel P performed a sale transaction worth $285.96 thousand. This sale at $1579.89 each has eliminated 0.18 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 3.68 percent increase since the transaction was reported. The insider now is left with 0.57 thousand shares remaining in the account. Reynolds Shelley, who performs the Vice President job, sold 0.44 thousand shares for $687.45 thousand. The disposal occurred on 11/15/2018 was priced at $1573.11 per share. The share price soared 4.13 percent since the reporting date. Reynolds Shelley now left with a stake of 6.12 thousand AMZN stock worth $10.03 million after the insider selling.

The stock is currently hovering around the first support level of $1611.46. Below this, the next support is placed in the zone of $1584.91. Till the time, the AMZN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 49.7 on daily chart, which may remain a cause for concern. If the price breaks below $1584.91 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $1651.98 mark may result into a pull-back move towards $1665.94 level.

Shares of Amazon.com, Inc. (AMZN) are trading at a P/E ratio of 80.22 times earnings reported for the past 12 months. The industry AMZN operates in has an average P/E of 46.18. Its P/E ratio went as low as 75.73X and as high as 540.94 over the 5-year span.Further, it is sporting a 3.51 on the Price-to-Sales ratio. Compare this with the industry average P/S of 2.16. 40.2 percent is the gross profit margin for Amazon.com, Inc. and operating margin sits at 5.3 percent. Along with this, the net profit margin is 4.3 percent.