Is Amazon Too Cheap Ahead of Earnings? Put Yields are High, Implying AMZN Stock Could Rally

Amazon stock (AMZN) could be undervalued here, especially given its high put option yields over the next month. The market fears another drop in free cash flow (FCF) as occurred in Q3. However, analysts have been raising their price targets (PTs) in the past two months.

AMZN is at $234.11 in midday trading on Tuesday, Jan. 20. After Amazon released its Q3 results on Oct. 30, AMZN initially spiked to over $253, but later dropped to $217.14 on Nov. 30. Since then, it has slowly drifted higher.