Amazon.com (AMZN 0.76%) reported a third-quarter loss of $0.09 per share last week while Wal-Mart (WMT 0.23%) 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.
