Growth Story Is Over at Amazon – Sell AMZN Stock ASAP!

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Amazon.com, Inc. (NASDAQ:AMZN) is the quintessential growth story to many investors. The retail giant should finish 2014 with nearly $90 billion in total revenue — up 20% from the prior year and roughly double the already impressive $48 billion in sales recorded by AMZN in 2011.

Growth Story Is Over at Amazon - Sell AMZN Stock ASAP!Ten-year returns of 630% for Amazon stock — about six times the returns of the S&P 500 index in that same period — are also pretty darn impressive.

But there’s big trouble at this e-commerce big shot lately, because all those sales and all that prior success for AMZN hasn’t added up to more than a few pennies in profits lately. Amazon stock holders have punished shares in the past year as a result, with the company selling off about 25% vs. gains of about 10% for the S&P.

The reason? Well, Wall Street thinks the go-go growth days of Amazon are over, and that the company will have a lot of trouble translating that big top line into a substantial bottom line.

And I completely agree.

Here’s why the growth story at Amazon should be over for investors, and why you shouldn’t be fooled into bargain hunting for AMZN stock in 2015.

AMZN Earnings Stink: AMZN will finish the year substantially in the red, with forecasts for a loss of 77 cents a share. What’s worse, Amazon has posted even deeper losses than expected in the past two quarters. What’s the point of all that scale if you can’t make any money on it? I expect Amazon earnings next week to show yet another nasty quarter, with perhaps even another nasty miss. Heck, even big-box electronics retailer Best Buy Co Inc (NYSE:BBY) has managed to post profits four quarters running, and beat earnings expectations every time!

Amazon Still Burning Cash: Tech giant Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) has done very well by acquiring smaller companies or branching into creative new areas … but AMZN has nowhere near to Google’s track record here. Costly boondoggles of 2014 included the ill-advised Amazon Fire Phone, which sold a pathetic 35,000 units at launch, as well as the purchase of video game spectator company Twitch for nearly $1 billion. But Amazon isn’t done, recently branching out into its own private-label diapers (which, by the way, stunk it up with consumers) and planning to produce theatrical programming that includes Hollywood-style feature films! If you think Amazon has learned from its poor performance and is being more responsible with its cash … think again.

Sentiment Is Ugly: With growth stocks like Amazon, the narrative of hopes and dreams is crucial. Back in 2011 and 2012, investors were willing to overlook Amazon’s thin margins and mediocre profits with the idea that AMZN stock would pummel brick-and-mortar stores into submission, then finally start delivering profits once it reached critical mass. As time wore on and profits failed to show up, investors stopped giving Amazon stock the benefit of the doubt and sold, sold, sold. Now the narrative around AMZN is not one of optimism and growth, but one of eye-rolling skepticism. Amazon needs to break that storyline, but clearly hasn’t done so yet.

It’s undeniable that Amazon is an e-commerce superpower. But just because I order shoes from Amazon.com or watch The Sopranos on Amazon Instant Video doesn’t mean that I have to like the stock.

Don’t believe in the Amazon growth narrative in 2015 … because while sales are strong, the profits will continue to disappoint Wall Street.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP

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