Amazon (AMZN) is a weird beast in that its earnings are pretty volatile, which makes valuing the company difficult.
It has taken over the country’s retail marketplace by effectively being the go-to discounter. Anything I buy, I buy on Amazon at this point, except for clothing. Nothing can replace it. It will only continue to reach into the world.
On a visit to a manufacturing plant in Texas last month, the owner told me that they are now purchasing parts and things like screws through Amazon, not their old suppliers. Zoinks!
Meanwhile, AMZN constantly is spending money on new initiatives like Amazon Web Services and bolstering its Amazon Prime digital content, which could make it a true media threat, too.
There’s no way to assign a number you can trust on what the company’s growth rate might be, and its P/E is a joke thanks to its volatile earnings.
What you can trust is that Amazon has a very clear long-term plan, and the patience and brains to pull it off. I suggest just buying and holding.