AMAZON.COM INC (NASDAQ:AMZN) Blends Strong Fundamentals with Technical Breakout Potential

Investors frequently look for stocks that blend solid fundamental growth prospects with positive technical setups, as this combined method can improve the chances of finding successful opportunities. The approach to choosing AMAZON.COM INC (NASDAQ:AMZN) focuses on identifying companies with strong earnings and revenue growth (fundamental strength) while also displaying technical signals that point to a possible or current breakout. This technique targets stocks likely to gain upward movement, using both financial health indicators and market behavior.

Why AMZN Meets the Strong Growth Stock Standards

Fundamental Strength

Amazon’s fundamental performance shows several important features of a growth stock, as detailed in its fundamental analysis report:

• Strong Growth Metrics:

  • Revenue has increased at an average yearly rate of 17.86% in recent years, with a 10.87% rise in the last year.
  • Earnings Per Share (EPS) jumped 56.94% compared to the previous year, with a three-year average growth rate of 36.89%.
  • Future EPS growth is estimated at 17.92%, showing continued progress.

• Profitability:

  • Amazon’s Profit Margin (10.54%) and Operating Margin (11.37%) rank among the best in its industry (Broadline Retail), surpassing 85.7% and 78.6% of competitors, respectively.
  • Return on Equity (ROE) is 21.16%, significantly higher than industry norms.

• Valuation Factors:

  • While Amazon’s stock carries a higher price (P/E of 33.73), this is supported by its leading growth and profitability. The PEG ratio, considering growth, stays reasonable given its earnings path.

These numbers match the growth investing ideas covered in our guide to growth stocks, where companies reinvest earnings into growth rather than dividends—a key part of Amazon’s plan.

Technical Breakout Possibility

Amazon’s technical analysis report reveals a promising setup:

• Trend and Momentum:

  • The long-term trend stays positive, with the stock above important moving averages (50-day: $219.47, 200-day: $210.50).
  • Short-term stability in the $211–$237 range hints at a possible breakout, with lower volatility pointing to accumulation.

• Support Levels:

  • Solid support is found near $219.47, reinforced by multiple trendlines and moving averages. A move above recent highs could indicate further gains.

• Relative Strength:

  • Amazon beats 80% of all stocks over the past year and 70% of its industry peers, showing steady market trust.

The mix of a positive long-term trend and a narrowing trading range fits classic breakout scenarios, where stability often leads to a directional shift.

Why This Mix Is Important

Growth stocks with technical breakouts provide two benefits:

1. Fundamental Stability: Strong earnings and revenue growth lower risk during market swings.
2. Technical Validation: Breakouts confirm investor interest, suggesting institutional support and momentum continuation.

Amazon represents this balance—its fundamentals support a higher valuation, while its technicals indicate readiness for further gains.

Find More Growth Stocks with Breakout Potential

For investors searching for similar options, our Strong Growth Stocks with Good Technical Setup Ratings screen highlights other promising candidates combining growth and momentum.

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Disclaimer: This analysis is not investment advice. Conduct your own research or consult a financial advisor before making decisions. Past performance does not guarantee future results.