By now, people are already tired of my ranting (for instance, here and here) regarding Amazon.com (AMZN). I am pretty sure that by now, logical arguments won't cut through. Words are no longer enough. So I decided that illustrating what's happening is, perhaps, better. After all, a picture is worth a thousand words.
As we can see, none of the companies separated much from the group. Amazon.com ended up with the lowest TTM EPS, but still "in the cloud" -- though these numbers don't include the last horrid quarter.
Now here's what happened during those 10 years, to the same stocks:
Whoa. Now someone separated from the group alright! Although AMZN did nothing earnings-wise, it still took off like a rocket in the last 5 years! How? Purely on multiple expansion, for the earnings couldn't help:
So, how would that first chart look, if we included a true growth stock, such as Apple (AAPL), for comparison purposes? It would look like this:
See the difference? See how Amazon, when compared to a group of tech laggards, differs not at all from them in terms of earnings growth over a full decade, yet its stock managed to almost keep up with a tremendous earnings growth story like Apple? This makes no sense, so Amazon.com will go down sooner or later, and it will go down heavily.
Disclosure: I am short AMZN.