Amazon (NASDAQ:AMZN) announced its quarterly results on 23 October after market close. In our preview for Amazon Q3 2013 earnings we had highlighted the high chance of Amazon missing the analyst estimates of 22% growth in revenue. However, the results were a cracker as far as the topline growth was concerned. The company reported a 24% Y/Y jump in sales beating our expectations. However the revenue beat does not change much when looking at Amazon stock as an investment
Amazon is a great business which is justified by its phenomenal revenue growth and significantly high cash generation abilities. However considering the fact that the company is yet to show stable income generation capabilities, the stock remains a high risk bet with its current price-to-earnings multiple of 1297.
The quarterly performance reported by the company caused a storm in the market with Amazon stock price jumping 9.4% in the regular trading session on Friday. While the market is upbeat following the revenue beat and earnings in line with analyst estimates, we still believe that the company needs to use operating levers in order to push up its efficiency and thereby provide better returns for investors. Until then the stock price will be fuelled more by speculative objectives rather than sound business and investment sense.
To see Amazon’s current stock price, please click here: (NASDAQ:AMZN)