Amazon.com, Inc. (AMZN): Another Company Getting Fresh

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The company has grown its top line by nearly 4%, which is higher than the industry average. It’s debt to equity ratio is almost zero (0.01). Plus, net income for the last quarter rose 20.7%. This is the type of performance that investors love.

In the next year, look for strong EPS and revenue growth. Earnings-per-share will likely hit close to $1.45-$1.50. If you own this stock, keep it. If you don’t own, consider owning it.

The bottom line for Amazon

The only way for Amazon.com, Inc. (NASDAQ:AMZN) to bring real net income with its grocery delivery service is to charge a high premium on goods and delivery. It currently offers free delivery on orders $35 and over in its limited markets.

A major opportunity for Amazon.com, Inc. (NASDAQ:AMZN) would be up-selling any non-grocery items in the delivery. This could help cover small margins if the company were to sell electronics, media, or other goods along with groceries. Groceries alone won’t be profitable. The margins are very small, even without transportation costs.

It is very important to note that Amazon.com, Inc. (NASDAQ:AMZN) is still a powerhouse and worthy of a buy. Its product mix is strong, with 31% of all revenue coming from media sales, 64% from general merchandise, and 5% from other services. The company is still a buy, just not for groceries.

Austin Higgins has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Inc. (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM). The Motley Fool owns shares of Amazon.com, Inc. (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM).

The article Another Company Getting Fresh originally appeared on Fool.com.

Austin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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