Eseandre Mordi
⬤ Amazon's stock has been climbing through early 2025 and is now sitting close to $232. At the same time, the company's trailing price-to-earnings ratio has dropped to about 32.78, which tells us that Amazon's earnings are growing faster than its stock price. The recent chart data shows AMZN has bounced back strongly from several dips over the past couple of years, even as the valuation multiple has been trending downward.
⬤ Looking at the chart, Amazon has been on a solid upward path since late 2022, with some impressive recoveries along the way. We're talking about price jumps of more than 20%, 60%, and even over 80% from previous lows. But here's the interesting part: while the stock kept climbing, the trailing P/E ratio has been heading in the opposite direction, now hovering in the low-30s. This reflects Amazon's improving profitability and more stable investor expectations about the company's earnings power.
⬤ The numbers also show that even though AMZN's stock price is way up from where it was in late 2022 and early 2023, the valuation has actually compressed quite a bit. With Q1 earnings just around the corner, traders are paying close attention to how Amazon's revenue and profit trends stack up against the current price level near $225 to $232. It's become increasingly important to watch both the stock's momentum and valuation metrics like the P/E ratio heading into earnings season.
⬤ What makes this worth noting is that Amazon is managing to hold a strong stock price while its P/E ratio falls—basically, the company is delivering better earnings relative to its share price gains. If this pattern continues, it could shift how the market views growth stocks in general and influence investor appetite for risk during the upcoming reporting period.
Eseandre Mordi
