Is AMZN still overvalued or is now the time to buy?
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Big Five American tech companies, alongside Alphabet (GOOGL), Apple (AAPL), Meta (FB), and Microsoft (MSFT), and is currently valued at $1.09 trillion. The stock was last seen up 3% to trade at $2,144.62.
The equity is just one session removed from a two-year low of $2,025.20, with pressure at the 10-day moving average looming ahead. The stock saw a breakdown below a former floor at the $2,705 level late last month, which has put AMZN at a 24.5% year-to-date deficit.
Amazon stock trades at forward price-earnings ratio of 47.62, which is a rich value in comparison to other big tech companies like Alphabet, Apple, Meta, and Microsoft, which all have a price-earnings ratios under 30.00. The figure is still relatively low in comparison to AMZN’s previous valuations, with its current price per share sitting near levels not seen since its pandemic-related selloff. In addition, Amazon stock trades at a price-sales ratio of 2.31, which is an intriguing value when considering the scope of its dominance across multiple markets.
Furthermore, the tech giant's business is estimated to increase revenues 11.9% for fiscal 2022 and 16.9% for fiscal 2023. However, estimates indicate that AMZN will end fiscal 2022 with a 75.3% decrease in earnings. Nonetheless, Amazon will more than likely see its business resume growth, with estimates indicating 237.5% earnings growth for fiscal 2023. As a result, this current dip in Amazon stock should be nothing more than a buying opportunity for long-term investors.