AMZN Stock Still Struggling as Amazon Can’t Turn a Profit

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amzn stock amazonDespite the fact that Amazon (AMZN) continues to perform well, with revenue increasing 23% to more than $19 billion in its most recent quarterly statement, some investors continue to hold off on buying AMZN stock.

There are multiple reasons for this, headlined by the fact that the company lost $126 million, which is a difficult task to accomplish when you are generating as much in sales as AMZN.

Another reason for the pessimistic stance on Amazon stock? Jeff Bezos has not been able to win people over with the company’s Fire Phone or dream of a drone delivery system.

Furthermore, the company is secretive regarding many of its sales numbers, such as those for the Kindle Fire.

Finally, the operating loss is not expected to get any better with the third quarter results, with some expecting this to reach as high as $810 million, which would be in stark contrast to the $25 million loss from the same quarter of 2013.

With numbers like these, coupled with a few product flops, some investors continue to shy away from AMZN stock until the company puts up profits to justify its current price levels.

The sales are there, for certain, and Amazon’s long-term track record is still good. For instance, the stock is up an amazing 255% in the last five years vs. just 85% for the S&P 500 in the same period.

But lately, AMZN stock has lagged big time. Shares are off about 20% year-to-date in 2014, while the broader stock market is up about 7%.

If Amazon is going to change this trajectory, it needs to change investor perceptions with a strong profits in its next earnings report.

That doesn’t seem likely, however, given the recent moves there… so AMZN stock may be stuck for some time.

As of this writing, Chris Bibey did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2014/09/amzn-stock-amazon-profit/.

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