Why Amazon Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online retail giant Amazon.com (NASDAQ: AMZN  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Amazon and see what CAPS investors are saying about the stock right now.

Amazon facts

 

 

Headquarters (founded)

Seattle, Wash. (1994)

Market Cap

$122.6 billion

Industry

Internet retail

Trailing-12-Month Revenue

$64.0 billion

Management

Founder/Chairman/CEO Jeff Bezos

CFO Thomas Szkutak

Return on Equity (average, past 3 years)

7.6%

Cash/Debt

$7.9 billion / $3.0 billion

Competitors

Apple

eBay 

Wal-Mart

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 20% of the 6,813 members who have rated Amazon believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, 3Rules, wrote that the Amazon bear case all boiled down to price:

I know, it's always a foolish bet to sell AMZN short. My sentiment isn't against the company or the stock in the long term; I just think it's overdue for a major correction. With a forward (projected) P/E of 80, and trading at over 14 times book value, I believe stock is ripe for some major profit taking. The chart for the last 4 months shows a series of lower highs and lower lows, which does not portend well for the near future.  

Everyone knows Amazon is the king of the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of competitors'. The Motley Fool's premium report will tell you what's driving the company's growth and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.


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