Amazon.com Inc (AMZN) Can Get To $400 And More, But Near-Term There Are Profitability Concerns

There’s not much positive chatter going around about Amazon.com, Inc. (NASDAQ:AMZN) as the company reported first slump in fundamentals. The current price of about $311.5 is almost 22% lower than at the start of the year and investors are getting impatient with trusting Jeff Bezos for another 10 years period of expansionary growth. CNBC depicted bullish and bearish opinions on the share price for the future of the e-commerce platform. Let’s start with the dark side.

“I like Amazon.com, Inc. (NASDAQ:AMZN) very much. I never saw a company going from $5 billion in sales to $80 billion in sales in 10 years. The problem is valuation for me, Bill, it’s all it is. It’s a great company. Bezos has told that he doesn’t care about investors. He cares about customers. If they even did an 8% margin the valuation wouldn’t be right and I have problems believing that they will ever going to get to profitability,” said Bob Olstein, Olstein Capital Management.

Now, the question about profitability is quite difficult to analyze as an outsider of Amazon.com, Inc. (NASDAQ:AMZN), but Mr. Olstein’s point could be interpreted as: There could be a point where expansion comes at too high a cost, which will squeeze profits out of the company. Nevertheless, the states of affairs for the tech giant aren’t that gruesome because some analysts still have high hopes in the e-commerce platform. Moreover, it has gained enough market power to survive, at least.

“Amazon.com, Inc. (NASDAQ:AMZN)’s market cap relative to sales is no different from Wal-Mart Stores, Inc. (NYSE:WMT)’s, despite the fact that Amazon.com, Inc. (NASDAQ:AMZN) over time should have a much more capital efficient model. I have no doubt that Amazon.com, Inc. (NASDAQ:AMZN) can achieve 6% to 8% retail margins and that they can have $300 billion and plus in sales,” Josh Spencer, T.Rowe Price Fund manager.

Spencer disclosed his belief to be that Jeff Bezos’ business will get to $400 and will bypass that level. However, if investors start fuming with anxiety that their money is a sunk cost, there are little chances for the commerce titan to even have the chance of further pursuing its upswing.

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