Tuesday, February 3, 2015

Further Proof That Amazon Won't Ever Make A Lasting Profit


Summary

  • Amazon reported Q4 '14 earnings that smashed reduced analyst estimates.
  • The online retail giant surged 13% based on those numbers, but the gains will only encourage further competition for a low-margin business.
  • Investors should sell shares into the rally.
After beating analyst estimates for Q4 and surging nearly $43 the next trading day, Amazon.com (NASDAQ:AMZN) is probably further away from a lasting profit profile. A previous article - Why Amazon Is Likely To Never Make A Profit - highlighted how competition was joining the fray, yet Amazon doesn't produce meaningful profits. The prime reason being the astonishing market valuation of Amazon in general, and the huge $20.6 billion gain due to a small profit sure help embolden the competition into the sector.

Read the full article at Seeking Alpha.



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