Amazon has no long-term debt, and has cash in hand of $4.97 billion; the company has operating cash flows of $3.22 billion. This is good for the investments that Amazon wants to make to give its customers a same-day delivery option. The company keeps engaging in share issues and buybacks.
From a competitor's point of view, Amazon is the beneficiary of Best Buy Co. (BBY) losing its market share in electronics retail. Amazon Prime and LoveFilm compete with Netflix. LoveFilm's unlimited streaming costs £4.99/month, as compared to Netflix charging $7.99/month.
Amazon is a high risk investment because of its high multiple relative to its earnings. Any short term fall in revenues or gross margin can have a significant impact on the share price. However, over the long run, Amazon is set to continue to benefit from the consumer shift from offline to online.
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