Why Amazon Is Poised to Pull Back

Market-lagging returns could be written in this 2-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Mar 12, 2013 at 6:00PM
Technology and Telecom

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 (1994)

Market Cap

$123.3 billion


Internet retail

Trailing-12-Month Revenue

$61.1 billion


Founder/Chairman/CEO Jeff Bezos

CFO Thomas Szkutak

Return on Equity (average, past 3 years)



$11.5 billion / $4.4 billion





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

On CAPS, 21% of the 6,801 members who have rated Amazon believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, Skoob111, succinctly summed up the Amazon bear case for our community:

This stock has too much market coverage for its current P/E ratio. The stock price is simply not sustainable, and the market has overvalued it, based on future hopes of growth. With Govs going broke, and imposing new taxes on Internet sales, buying online is less attractive, given shipping costs and, now, taxes. I do believe the company model is good, and will not go bankrupt, but I do not believe in ANY company with this much hype/ earnings.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.