If you are an investor, you probably already know that you can take advantage of afterhours trading in stocks. However, you might not be aware of exactly what is
involved with this type of trading. It involves more than just watching a stock's price rise or fall. This trading method also entails reading charts, examining recent news, and keeping track of your own performance.
The Amazon.com (AMZN) stock price fell in reaction to the company's third quarter report. After reporting a decline in net income, the stock plunged. Despite reporting strong revenue growth, Amazon's EPS came in at $0.10, far below the consensus estimate of $0.15 per share.
Analysts predicted that the company would cut its workforce by approximately 10%, resulting in a reduction in the number of employees. However, it's unclear how many layoffs Amazon plans to undertake. At the same time, Amazon was expected to focus on its retail division.
Regardless, investors remain bullish on the company, expecting the company to continue to lead the market for cloud computing services. This is mainly thanks to its highly profitable Amazon Web Services business, which helped the stock to skyrocket over the past few years.
In the coming months, investors are looking forward to Amazon's Q3 September 2022 earnings. The report is scheduled for today at 4PM. Amazon expects to generate $125 billion to $130 billion in revenue for the third quarter. It's also forecasting a profit of $0.15 per share.
Amazon has been one of the top large-cap tech stocks in the market. Over the past year, the stock has risen 79 percent. With a market cap of over $2 trillion, it's not hard to see why.
However, despite the strong growth in its e-commerce business, the stock is still trading at high multiples. As a result, the IBD Stock Checkup tool shows that the company's Relative Strength Rating is weak. If this trend continues, the stock could fall below the 41 level by June/June 2023.
Even though the company's EPS is usually above the consensus, the company's margins aren't always high. Consequently, the narrative for Amazon moving forward will depend on the margins of its cloud computing services.
Moreover, Amazon has exciting new growth opportunities in AI, devices, and drone delivery. All of these areas will help amplify the company's profits globally. But the company's stock may be too expensive at this point. There are other companies that offer more affordable stock options.
Amazon.com stock performance
Amazon.com stock was down a mere 14% after hours on Thursday after the company reported a number of important milestones. The biggest one being that it is planning a stock split to increase the amount of shares outstanding. Also, it reported a surprisingly good quarter, even though it failed to deliver on Wall Street's expectations.
There are several key factors affecting Amazon's performance. First, it's facing stiff competition from Walmart and CVS in the health care space. Plus, a growing number of companies are announcing layoffs. In addition, the company's operating margin is expected to dwindle from 5.3% this year to 2.3% next.
Amazon's revenue was up 15% from the prior year, which is the company's best growth since it was founded in 2006. However, the company also reported that its net income declined by 9%, while its operating margin dropped from 2.9% to 1.4%. It's also a good idea to take a look at the company's revenue and net income in constant currency terms.
While it's not surprising that Amazon's stock is up, it's not so good when you consider that it's trading at 43 times next year's expected earnings. If you're a long term investor, you could potentially lose money in this stock.
In fact, if you want to make an informed decision on how to invest, you may be better off focusing on other tech stocks. For example, Amazon's stock has a price to earnings ratio of more than 4.5 times, which is quite a bit higher than its peer group of Apple, Microsoft, and Google. That's not to mention its stock price has been volatile in the past two months, dropping more than 4% during a single day in October.
Whether you're investing in Amazon or any other tech stock, timing is always important. When you're looking for the best entry points, you should look at fundamental analysis to see if a stock's e-commerce, cloud computing, artificial intelligence, and retail business segments have a good chance of growing. This is particularly true of Amazon, which has a retail business that generates sales in a variety of categories.
Amazon.com stock chart
When you are looking at the Amazon.com stock chart after hours, it's hard to not notice that the company has a long way to go in order to become a household name. While the stock may have been around for a while, the competition is just beginning. As such, the next few years will likely be an exciting time for investors. The company is also expanding its product offerings, ranging from music streaming services to mobile commerce. In the meantime, a few companies are reporting layoffs.
For example, Amazon purchased PillPack four years ago, allowing it to ship prescription drugs around the country. Although it's unlikely that Amazon will ever be a household name, it is likely that this will be one of the largest online retail players in the future. Another major player, CVS, is reportedly looking to expand into health care, a field that Amazon has yet to delve into. As far as the stock goes, it was a tough slog in April. After a few weeks of solid trading, Amazon's stock sank, shedding 14% in response.
Amazon.com stock news
The stock of Amazon.com has plummeted since its record-setting third-quarter earnings results. Shares have plunged over 50% during this year. Despite the plunge, investors still have a lot to cheer about. The company's stock remains incredibly cheap based on its potential profits. However, there are some key factors to consider.
First and foremost, there are a number of macro headwinds facing the company. For one, the company is facing competition from Walmart, which is expanding into health care services. Secondly, the company is battling a shift in consumer spending. Third, and most importantly, the company has faced concerns over slowing growth at its AWS business. Fortunately, the company is going on offense with new programs such as Buy with Prime.
Lastly, there are a number of human resources challenges facing the company. It is currently laying off 10,000 corporate employees and cutting the Alexa assistant. These layoffs come after reports of a $10 billion loss. And, despite the negative news, Amazon still remains one of the best-performing stocks of the past generation. If you're looking for an investment in a low-risk, low-risk entry point, you might want to start with Amazon. Specifically, you could consider shorting the stock. This way, you'll make money if the stock falls, but lose all of the losses if it continues to perform well.
Another key factor to consider is the stock's pricing to sales ratio. The stock is currently trading at less than two times its sales, which is considered extremely low. Combined with its growth opportunity, this means that the stock could see a boost if its next earnings report in January is strong.
As a reminder, however, Amazon's 2022 return isn't a guarantee of future returns. Besides, Amazon's revenue has been declining over the last few quarters because it is being compared with the pandemic boom that will be hitting the country in 2021. By contrast, the company's sales have grown at 15% nationally over the past decade. So if the company can get back to 15% growth in the fourth quarter, investors will be very happy.