Is Amazon A Call Or Put Option Going Into The Holiday Shopping Season?

As we approach the end of 2015, traders and investors alike are looking to make smart financial decisions ahead of the holiday shopping season. The possibility of generating quick profits off top performing stocks is an enticement that many find hard to resist. One such stock that has garnered tremendous appeal of late is Amazon.com. It is the top performing tech stock of 2015 and it is the go-to investment of 9 of the top hedge funds, including Lone Pine Capital and Tiger Global. The stock is currently trading at $671.20, with a market cap of $313.34 billion and a price-earnings ratio of 941.48.The current earnings per share is -0.52. If we look at the 52-week trading range of the stock, it has a low of $285.25 and a high of $682.77. Clearly, Amazon is at the top of its game in terms of performance and profitability. The one-year price chart of the stock looks more like the launch of a NASA spacecraft than anything we routinely see on the NASDAQ. The upward trajectory of the stock is nothing short of phenomenal.

Amazon Year to Date

In fact, for the year to date the stock has grown 116.26% – shattering expectations on most every level. If we delve into the opinions of analysts, Amazon.com remains a strong buy. On a scale of 1.0 to 5.0, the stock has a mean recommendation of 1.8. The mean target price is $726.82 and the high target price is $800 per share. On the low end, all the polled brokers forecast a price of $490. For 2015, the vast majority of research firms initiated upgrade action to a buy, outperform, overweight, market outperform or strong buy. These include Raymond James, Stifel, B. Riley & Company, JP Morgan, Monness Crespi & Hardt. While the current stock price of Amazon is trading near its one-year high, there is general consensus that the stock is either a hold as an investment or a buy. There are plenty of core strengths with Amazon, including its incredible net income growth and revenue growth. The company has a solid financial position and it has been able to successfully manage its debt levels by most standards. The only downside of the stock is its ROE.