In many ways, Amazon.com (NASDAQ:AMZN) seems recession-proof. The company's e-commerce operation has a reputation for offering low prices, and its Prime membership program offers significant value for just $99 a year, providing members with free two-day shipping on millions of items as well as video streaming and a slew of other benefits.

Since its inception, Amazon has staked its reputation on value, using efficiencies and the flywheel effect to drive it, and customers have bought into the proposition. Its cloud-computing division, Amazon Web Services, is also likely to weather a recession as companies need data storage and other cloud services regardless of the economic climate.

An Amazon employee in a fulfillment center

Image source: Amazon.com.

Amazon'd business fared well during the recent financial crisis, as revenue grew by 29.2% in 2008 and 28.4% in 2009. While those numbers were slower than the company's revenue growth in the years before and after, they still represent an exceptional growth rate at a time when many retailers were losing sales and overall retail sales were falling.

Earnings per share growth was also solid back then, increasing 33% in 2008 and then 37% in 2009. Back then, Amazon's profit margins were better than they are today as the company had yet to make massive investments in fulfillment centers, AWS, and other infrastructure that it has since. In 2009, it had profit margin of 3.7%, much better than the may of its competitors.

But what about Amazon's stock during a recession-fueled market downturn? How might it do?

Don't get too excited 

While Amazon has proven that it can thrive even during a recession, the stock's performance has not always followed suit. Amazon shares lost nearly two-thirds of their value from their peak early in 2008 at $97.43 to their bottom at $34.68 in November 2008, a drop of 64.4%. The S&P 500 fell, by comparison, 56.8%.

In other words, despite Amazon's sustained revenue and profit growth during the recession, the market still punished it more than it did the average stock. That's because high-valued growth stocks like Amazon tend to fall more in bear markets as investors flee to safety and dividend payers.  

While the broad market plunged through 2008, Wal-Mart (NYSE: WMT) stock actually gained that year as the retail giant is widely perceived to be recession-proof and its stock pays a dividend. Wal-Mart shares ultimately fell during the worst of the sell-off, but only lost 27% from their peak in September 2008 to their nadir in February 2009.

Now vs. then

 Amazon stock would probably face a similar tumble in a new market downturn as it did in 2008. Despite the e-commerce giant's strong profit growth recently, the stock still trades at a triple-digit price-to-earnings ratio. Amazon's share price has largely soared on the strength of its revenue growth and its evident competitive advantages, as the market expects profits to eventually justify its market cap over $400 billion. Amazon is such a unique company that it's difficult to value the stock, as future profits are highly unpredictable. The stock is particularly volatile for a company of its size, and often swings by double digits on its earnings reports.

That means that a bear market would be likely to push Amazon's stock down significantly, as it would with most growth stocks, since it would compress the overall valuation of the market. But the upside of such a move is that it would present an excellent buying opportunity to pick up new shares, as Amazon the business should be able to continue growing even in a down economy.

In fact, a recession could even make Amazon stronger as it would likely pressure a number of its retail rivals and force some of them out of business. Though Amazon stock would likely take a hit from a market downturn, over the long term the stock should be even stronger because of it.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.