Wall Street give Amazon a pass to grab growth now, profits later

Amazon remains strong even if the profits are not coming in at the moment. Analysts thinks that this is a part of the company’s strategy in continuously reinventing and making the trends. The ecommerce giant has convinced Wall Street that definitely profits will come later.


Although profits have been typically weak for Amazon, observers say Wall Street continues to give Amazon a pass, mostly, on its profitability, betting that its strategy of pouring money back into the business and exploring more ways to make money digitally will bring investors big rewards down the road. Amazon has convinced Wall Street that big profits will come but that near-term sales growth is more important. The company continues to reinvent itself and the strategy on how profit will come in is part of Amazon’s magic.

According to Timothy Green, a writer at the Motley Fool investment website “The value of the company in the public market is just not tied to reality, I think, and many analysts turn a blind eye to the full cost of Amazon’s financing when judging its profitability. ”

Green and others, however, remain vastly outnumbered. Some 40 Wall Street analysts have had buy recommendations on Amazon’s stock of late, according to Bloomberg News. The consensus of analysts is that the stock could rise by about a third to around $760.

To know more about what the other experts think of Amazon hit on the link http://www.mprnews.org/story/2016/01/20/amazon-retail-growth-pressures-target-best-buy

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