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The Dip in Amazon Stock Price Is Not a Buying Opportunity, Analysts Say

Amazon to Focus on European TV Viewers with Its New Expansion Plan

Amazon (NASDAQ: AMZN) stock price is down close to 12% from 52-weeks high of $2000 mark that it had hit three months ago. Traders’ concerns over lower than expected growth and market volatility are driving AMZN shares selloff.

AMZN shares are currently hovering around the lowest level in the last six months. Despite the slump, Amazon stock price is down almost 15% year to date.

Some analysts believe it’s not good time to buy AMZN shares. Indeed, they suggest waiting for the upcoming financial results before initiating any position.

AMZN Amazon.com, Inc. daily Stock Chart

Jefferies Suggest to Avoid The Dip in Amazon Stock Price

Although Jefferies maintains a stock price target of $2300 with a Buy rating, the firm warns investors not to buy Amazon ahead of the earnings report. The company is likely to report earnings by the end of this month. Its analyst Brent Thill is showing concerns over the performance in the fourth quarter.

Analyst Brent Thill says “Q4 consensus operating income may prove to be a stretch” and this “could weigh on AMZN shares if guidance once again falls short of street numbers.”

The analyst, however, looks optimistic about future fundamentals. The analyst claims that long-term growth potential in higher-margin businesses such as Amazon Web Services and advertising would support financial performance.

Some Bulls are Optimistic About Short-Term Trend

Value investors always like to buy stocks when they trade well below the 52-weeks high. AMZN shares are currently trading significantly below the highest level in the last twelve months.

Value and momentum investors believe the initial trade deal between the two largest economies would help Amazon stock price in setting a bullish trend. Amazon is among those companies that have significant penetration in both countries.

The market analysts expect Amazon to report earnings per share in the range of $4.50 for the fourth quarter compared to earnings of $3.03 in the year-ago period. The revenue expectation for the fourth quarter stands around $68 billion.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.