Shares of (NASDAQ:AMZN) fell by as much as 11% following the company's earnings release for the fourth quarter. This decline is a clear reaction to revenue and earnings that missed analyst expectations, but did these results really justify a swing in market capitalization of over $18 billion? A closer look at the numbers seems to indicate that less has changed with the investment thesis than you'd expect from the headlines.

Earnings below forecast reported fourth quarters diluted earnings of $0.51 per share. To be clear, this result is well below the consensus estimate of $0.69 and less than last year's EPS of $0.59. However, there are reasons why this miss is less relevant to than the average retailer such as Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Given's growth trajectory and rapid investment in distribution centers, data centers, digital content, and more, EPS has never been as relevant a measure of's performance as revenue and cash flow. If it were,'s forward price-to-earnings ratio of 67 is hard to justify in comparison to Wal-Mart and Target's forward P/E ratios of 13.

On an operating cash flow basis, had a stellar fourth quarter, reaching an all-time high of $5.6 billion.

In recent years, this solid cash flow has been mostly offset by's aggressive investment in facilities, software, and acquisitions. However, free cash improved significantly this quarter as illustrated by the chart below:

AMZN Cash from Operations (TTM) Chart

AMZN Cash from Operations (TTM) data by YCharts

While EPS may have disappointed some investors, a 10% rise in operating cash flow and significant improvement in free cash flow are better indicators of's solid performance.

Revenue below expectations?
The other half of's "miss" was revenue of $25.6 billion. Even though revenue grew over $4 billion (20%) from last year's fourth quarter and was in the upper half of management's guidance just three months ago, analysts expected revenue of $26.1 billion and were not happy with the "weak" results. For a sense of perspective, has grown revenue over 1,000% over the past decade as shown below:

AMZN Revenue (TTM) Chart

AMZN Revenue (TTM) data by YCharts

While still has years to go before it catches Wal-Mart as the world's largest retailer, this chart illustrates that the growth story is still intact and just how dramatically different the growth trajectory is than brick-and-mortar retailers like Wal-Mart and Target.

Looking ahead to next quarter, expects revenue to grow between 10% and 25%; quarterly results at the low end of this range would be cause for concern, but the continuation of 20% growth can hardly be considered alarming.

Keep an eye on Prime
EPS and revenue are getting most of the attention, but's statement that it is considering a $20 to $40 increase to its annual Amazon Prime subscription fee is probably worth more consideration. Customer experience and value proposition are two keys to's fantastic growth rate. At this time, it is uncertain whether such a price increase will be a drag on revenue growth or not; many thought that collecting sales tax would put far more of a dent in's growth than it has.

Whether or not there is a psychological barrier for customers at $100 and how the price increase changes the growth rate of Prime subscribers will be significant drivers of's ongoing growth. At $99 to $129 per year, would be far more expensive than a membership to Costco or a subscription to Netflix streaming video. This places added pressure on management to continue to deliver sufficient value to make a subscription worthwhile to more than 20 million subscribers.

While a potential slowdown in Prime subscriber growth would be a concern, there is of course an obvious benefit of higher fees; it is estimated that a fee increase would translate into $600 million of additional high-margin revenue. If is able to maintain a sufficient value proposition to continuing attracting subscribers to Prime and also collect an additional $600 million in revenue, this initial concern could quickly be morphed into yet another pillar of the investment thesis in

Focus on the long term
Regardless of whether an investor concludes that 20% revenue growth is good or bad, or whether EPS or cash flow is the preferred method of measuring, the fact is that the long-term story did not change as a result of fourth quarter results. The strengths behind's ongoing growth remain firmly in place, so long-term investors should not panic by the sudden drop in share price due to short-term reactions to earnings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.