Is Amazon Stock Worth It?

Despite being arguably the largest online retailer in the world Amazon (NASDAQ:AMZN) has come under some harsh criticism over the past year. With dwindling profits and a current price tag around $330 per share many have begun to question whether the internet giant’s revenue accurately represents its current asking price per share on the NASDAQ. But others argue that the current decline in the stock’s value is to be expected of any company making the sort of innovations and bold expansions that Amazon has taken in recent years.  Like most issues pertaining to the delicate and volatile nature of today’s market the answer may not be as cut and dry as one would like to think. The arguments for and against Amazon stock’s current market price are many and well defended on both sides.  In the following paragraphs we will analyze both sides of the debate on whether Amazon is able to justify the current price of its stock to answer the question “is it really worth it?”
 
No
Amazon’s struggles revenue wise over the past year have been well documented. Starting early with a disappointing January where the retailer showed far lower than projected earnings Amazon’s stock nosedived, falling nearly $50 per share in a single day. The following months were as unkind as throughout 2014 not aided by the increase in price of the popular service Amazon Prime from $79 to $99 and a less than stellar premier of their supposed game changer Amazon Fire smartphone which may have sold as little as 35,000 units in its first few months of release resulting in several price slashes to attempt and move the obviously initially overstocked devices. With these apparent missteps in two of the most promising burgeoning industries in the developed world at the moment, online media streaming and smartphones, the current price of Amazon’s stock would appear to be a gross over exaggeration of its actual value.

Yes
Despite its apparent revenue losses on paper, defenders that have flocked to the online retailer’s side state that there is much more to the equation of coming to a realistic and accurate value of a company’s stock than simply revenue. Amazon has prided itself during recent years in broadening their identity beyond that of simply an online vendor of commercial goods. Over the past several years Amazon has expanded its resume to include online media streamer, content creator with Amazon Prime original programming such as Alpha House, and soon limited private shipping company if it’s recently announced drone delivery service comes to fruition as planned. With these innovative new programs Amazon continues to distinguish itself as a company desiring innovation and expansion on a large scale and at an alarming pace. If the company continues to seek new markets and alternate revenue streams at the rate they have been as of late then the value of its stock could not only be a steal right now but could very well skyrocket much sooner than one might think.