AMZN: Don’t Shop Amazon Stock for Now

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Amazon.com, Inc. (AMZN) made headlines this week as it announced that it’s unleashing an army of 15,000 robots to assist employees at its fulfillment centers. Is this a sign that Amazon is expecting strong sales during the holidays? Is now a good time to buy into AMZN?

Amazon – Company Profile

amazon stock amzn stockWe all know Amazon. Amazon is the biggest online retailer out there, where you can buy just about anything you can think of and have it delivered to your home in just a few days. From its humble beginnings as an online bookseller, Amazon’s current size and status is a testament to its ability to execute.

Amazon currently employs over 117,000 full-time employees and is based in Seattle, Washington.

Amazon – Earnings Buzz

In its third quarter, Amazon took a big hit, posting a loss of 95 cents per share and missing revenue estimates by $260 million dollars. Looking ahead, Amazon is set to announce fourth-quarter earnings in January 2015. And, according to consensus estimates for fourth quarter, it doesn’t look like Amazon will rebound much from that initial loss.

Analysts’ estimate that earnings for the fourth quarter will be 18 cents per share, well below last year’s 51 cents per share. Revenue is estimated to be $29.75 billion, 16.3% higher compared to last year’s $25.59 billion. The average estimate for fiscal year 2014 earnings is a 76 cents per share loss.

Amazon – Current Ratings

Of the eight fundamental metrics I graded AMZN on, it only excelled in terms of sales growth (B). Meanwhile, Amazon scored lackluster C-ratings for earnings growth and earnings surprises.

As for the other metrics, cash flow and return on equity earned “Ds.” Analyst earnings revisions an earnings momentum for AMZN outright failed with a “F.” AMZN receives a “D” for its Quantitative Grade (indicating a poor risk-to-return ratio) and a “D” for its Fundamental Grade.

As of this posting, Dec. 3, I consider AMZN a “D-rated sell.”

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging GrowthUltimate GrowthFamily Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


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