Amazon (AMZN) stock needs little introduction. As the world’s foremost online retail company, Amazon has been a leading innovator in the retail space for roughly twenty years now. Customers love them, other retailers fear them greatly.

AMZN stock owners have had reason for mixed emotion. The company’s share price, until recently, had been rising tremendously. But the company has always struggled to generate meaningful profits.

It doesn’t pay a dividend or otherwise directly reward its shareholders, and Amazon stock has been falling dramatically since announcing disappointing holiday earnings. While Amazon shares were overvalued before, are they a buy following the recent dive?

AMZN Stock Pros

Transformational Company: AMZN stock represents an investment in one of the world’s most innovative, unique, and cutting-edge companies. While the company had relatively humble beginnings in online book sales, it now has its fingers in many pies.

AMZN was largely responsible for launching the eBook format. Amazon Web Services, its enterprise-facing cloud computing solutions arm, is a leader in its space. The Kindle tablet, while not a leader in the tablet space, has held its ground against Apple (AAPL), which is more than Microsoft (MSFT) can say about the MP3 player arena a few years back. Not everything Amazon tries works…witness the Amazon Fire phone…But much of it does.

And the company’s retail offerings are unmatched. It sells just about everything nowadays, with new offerings (food delivery?!) regularly arriving. Amazon’s logistics operation is virtually unmatched; it has researched or acquired leading intellectual property in robotics, drones, and other such cutting-edge areas that give it a sustainable cost advantage.

A Chance To Be #1: It’s too early to confidently forecast how much of brick and mortar store sales will eventually make their way online. But it’s fair to say that online will be a huge portion of overall retail sales. This is particularly true in developed economies. AMZN has the opportunity to eventually replace Wal-Mart (WMT) as the world’s largest retailer. And for much of its history on Wall Street, AMZN stock has been valued with that potential in mind.

In a scenario where Amazon successfully supplants Wal-Mart as the world’s dominant point of sale, Amazon stock would, even from today’s levels, have tons of upside. Once Amazon achieves that sort of ubiquity it would be able to finally raise prices and increase margins. Amazon would finally be significantly profitable.

Recent Selloff Offers Opportunity: AMZN stock has fallen from its recent $700 peak to as low as $475 during this selloff to start 2016. Amazon stock is now back to levels it traded at last July, wiping out the back half of 2015’s gains.

For investors wanting to buy in to Amazon, this is a much more agreeable entry point than chasing it during the euphoric end of 2015 run. It’s true that shares aren’t cheap by just about any possible calculation. However, you’re paying a bit less of a premium for the opportunity to own one of the country’s most exciting stocks.

AMZN Stock Cons

Still Really Expensive: Yes, the Amazon stock price has gotten a lot cheaper recently. Despite that, shares remain profoundly overvalued by traditional valuation metrics. You have to believe Amazon is a unique company that shouldn’t be judged in comparison with other listed companies to come close to rationalizing the current $530/share ticket price for AMZN stock.

The P/E ratio is well into the hundreds. Though admittedly Amazon shouldn’t be judged by P/E. It’s never prioritized making profits.

However, on EV/EBITDA, it’s at 33, more than 3x the generally reasonable 10 level. On a price to free cash flow basis, the ratio is an even worse 45. Put another way, for Amazon’s business at its current level of size and profitability, you’d have to suck off all the cash generated by the business for 45 years to get your initial investment back. Wal-Mart, by comparison, trades at 13 on that metric.

As mentioned above, if AMZN succeeds in supplanting Wal-Mart as the world’s largest retailer, it will have a tremendous market position. But Amazon stock has largely been priced for this; the stock would have 50% to 75% downside from current levels if it merely consolidates its business at its current (already large) size.

Regulatory Pushback: Much of Amazon’s advantage initially came from having very low prices. Particularly in the core books and media category, AMZN was usually the cheapest option for buying a new item, often by a substantial margin. In many categories today, that isn’t in the case. In some areas, like web services, commoditization seems to pose a great threat to long-term profitability.

On top of that, Amazon is losing its long-held advantage. In the past, it didn’t have to charge significant sales taxes to many of its customers. For retail, a business where margins are often just 2 or 3 percent, sales tax is a massive price differentiator.

Online retail is emptying more and more commercial real estate (read: mall vendors), hurting local property tax bases and also causing retail sector job losses. In response, governments are increasingly likely to turn up the heat against AMZN. Various foreign governments have also made noises about limiting Amazon’s ability to spread.

Too Many Side Projects? One downside of innovation is that companies can sometimes get distracted from their core vision. The recent disclosure by mall REIT operator General Growth Properties (GGP) that AMZN is considering opening 300-400 traditional book stores raises this question. Book stores in general have poor economics. Getting tied up in a rather odd non-core business with unattractive economics may reduce investors’ willingness to pay a big premium for the whole company. Physical book stores seem like Amazon is empire-building, rather than making shrewd business decisions.

Not a net positive for AMZN stock, euphemistically speaking.

Similarly, some of the consumer products raise doubts. The Fire Phone seemed like a bad idea from the beginning, and one that hasn’t been discarded completely quickly enough. The $50 tablet may have been a shrewd promotional move, on the other hand, it may just another margin-busting move in chasing sales with total disregard to profitability.

Amazon Stock: Verdict

This isn’t a stock I would buy at anywhere near today’s price. The current $530 levels bakes in a whole lot of successful growth and margin expansion. If things go to plan, then investors will be handsomely rewarded. For me, I prefer investments where valuations are moderate and the outlook is more visible.

But for investors who like Amazon’s story and are willing to take the gamble, certainly the current price is much more attractive than the near-$700/share level AMZN stock reached in late December.

At the time of this writing, Ian Bezek owned shares of Wal-Mart. He can be reached on Twitter at @irbezek.