High-Growth Stocks to Buy #2: Amazon (AMZN)
Sure, Amazon (AMZN) has hit a serious wall in 2014 as momentum has crumbled. Shares of AMZN stock are down more than 20% year-to-date, and investors are finally showing serious concerns about whether Amazon is committed to growing profits instead of simply growing sales.
But the reality is that even simply growing sales is an impressive feat in this troublesome market.
Amazon has grown its revenue from $34.2 billion in fiscal 2010 to a projected $90.8 billion this year — an amazing 165% growth rate.
Furthermore, Standard & Poor’s analysts project $1.09 in earnings per share for fiscal 2014, and an even more impressive $4.24 projected for fiscal 2015. That still gives AMZN stock a pricey forward P/E ratio of more than 70, but shows the company — and Wall Street — expects significant improvement to the bottom line going forward, even if profits weren’t there in the past.
If you’re a longer-term investor, there is a lot of potential in Amazon stock. I’d feel comfortable buying this high-growth play at or a bit below $300 per share after the correction, with the hope and expectation that growth materializes as planned — or even better than expected.