Amazon.com (NASDAQ:AMZN) reported a third-quarter loss of $0.09 per share last week while Wal-Mart (NYSE:WMT) posted $1.24 in earnings per share in its most recent quarter, yet Amazon trades at $360 per share and Wal-Mart at $77. What gives?
In the video below, Fool contributor Daniel Sparks explains why it's not earnings that get investors excited about Amazon. Earnings and dividends might be the story for Wal-Mart, but not for Amazon, he says.
E-commerce accounts for just 8% of U.S. retail sales, according to Forrester. This $230 billion e-commerce market is expected to grow to $370 billion by 2017. As the world leader in e-commerce with still plenty of runway ahead of it, Amazon is still a growth stock -- and it should be treated as such, says Daniel.
As a growth stock, Amazon is driven by other metrics and not earnings, Daniel explains. Wal-Mart is in a whole different ballpark.
Fool contributor Daniel Sparks has no position in any stocks mentioned. Erin Miller has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.