BWS Financial Downgrades Amazon.com (AMZN) to Sell, Citing Margin Concerns
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BWS Financial downgrades Amazon.com (Nasdaq: AMZN) from Hold to Sell following Q2 results, saying the margin story is nonexistent.
The firm said, "we expect the Company to face a tough time in being able to post operating margin close to 5 percent. AMZN is highly price competitive in the second half of the year, and the use of Amazon Prime puts additional pressure on earnings during high volume quarters."
That said, the firm said the endless cycle of less than 5% operating margin will keep AMZN's earnings under pressure. The hypnosis will wear off and the Street will value AMZN shares appropriately.
On the Zappos acquisition, the firm said it could become the first of AMZN trying to keep growth in the teens through a roll-up acquisition strategy, as the Company tries to fill-in underperforming areas.
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