Tuesday, 13 November 2018 09:16

Why it is the Right Time to Buy Amazon

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(Seattle)

Amazon has seen some significant volatility lately. A weak earnings report sent the stock plummeting, and weaker top line growth is making some worry. The stock is down 17% since the beginning of October. However, the company’s bottom line seems likely to grow strongly as it starts to benefit from its massive scale. A Nomura analyst summarized the situation best (and interestingly), saying “AMZN’s size and scale are eclipsing its ability to suppress margins … Put simply, it seems AMZN sales and GP [gross profit] dollars are growing faster than their ability to spend”.


FINSUM: We don’t think Amazon is in trouble by any means. The company is just transitioning into a more mature state where topline growth will slow, but margins will rise.

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