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Troy Wolverton of The Street.com has a bearish article on Amazon. His key points:

  • Lack of growth. Amazon is becoming a traditional retailer
    rather than a high-growth company, susceptible to normal retail
    seasonality; it's failed to branch out successfully from its core
    business of books, music and video (other than electronics); and other
    retailers prefer to buy ads from Google and Overture rather than sell
    via Amazon.
  • Stock is expensive: trades at 49 times '04 GAAP earnings, versus
    most retail stocks that trade at about 30 times. The recent rise in its
    stock is due more to short covering than a reflection of a strong
    underlying business.
  • Lack of near-term catalysts to move the stock up.

Quick thought: What doesn't he mention? Amazon still attracts
substantial traffic to its site. If it could monetize that traffic with
the same gross margins that Google and eBay have, it would be vastly
more profitable. That's why Amazon is trying to move into higher
margin, less capital-intensive businesses like third party sales,
search, and perhaps eventually will buy one of the comparison shopping
companies.

Source: The Street.com's bearish on Amazon