How Long Can Amazon.com, Inc. (AMZN) Defy Gravity?

On the other hand, that margins are beginning to improve suggests that the company may not have to wait that long after all. Is this the “transition” that Bezos is referring to? And it’s worth asking if all those years of declining margin are thing of the past. For that matter, as much as the company has been blamed for this perceived deficiency, it’s also been unfair that Amazon has been grouped with Wal-Mart Stores, Inc. (NYSE:WMT) or Target Corporation (NYSE:TGT).

I get the retail comparison. But this is a company that has much bigger ambitions than retail. It’s not easy to produce 30% growth year over year and maintain retail-level margins. Amazon has been aggressive in its investments for the future, which have adversely affected its margins. While I don’t expect the company to suddenly shift gears, this fourth-quarter report just may be the beginning of the margin turnaround story that investors have been waiting patiently for.

Let’s establish some perspective
Investors need to meet this company halfway, and not expect an immediate strategy change. The company has proven for a decade that it can deliver the goods to your doorstep and during each conference call. Besides, I don’t think changing its business model would serve the company in the long-term, nor would it reward investors for the premium they are paying for the shares today.

There aren’t many companies that are capable of doing the things that Amazon is doing. Whether or not the valuation is deserved is a separate subject. But there’s no denying that Amazon has been defying gravity for quite some time, and it may be a while before these shares fall down to earth.

The article How Long Can Amazon Defy Gravity? originally appeared on Fool.com and is written by Richard Saintvilus.

Fool contributor Richard Saintvilus owns shares of Apple (NASDAQ:AAPL). The Motley Fool recommends Amazon.com, Apple, Netflix, and Salesforce. The Motley Fool owns shares of Amazon.com, Apple, Netflix, and Oracle.

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