Morningstar Rating

Stock Research and Analysis

by R.J. Hottovy, CFA

Bulls Say

Amazon dominates the online retail landscape with 2013 product sales of more than $61 billion (excluding services), roughly equal the next nine closest nonauction competitors combined.
With more than half of the world's Internet users coming from developing markets, Amazon has a tremendous global opportunity.
The current Kindle suite of products, coupled with the potential development of a Web TV box or video game console, represent intriguing customer acquisition tools that capitalize on the shift to digital media while promoting Prime memberships and cloud computing capabilities. Read more 

Bears Say

Amazon faces competition from competing e-commerce websites offering online payments, comparison shopping sites, ad search engines, video streaming, and independent website hosting.
International growth brings unique challenges, as foreign governments are constantly amending e-commerce laws. Additionally, Amazon will square off with an incumbent local competitor in some overseas markets.
The company relies on several delivery companies for product distribution. If demand becomes too great, Amazon may have to invest more in its own fulfillment center capacity or delivery alternatives. Read more 

Management

Chairman and CEO Jeff Bezos founded Amazon.com in 1994. Tom Szkutak became CFO in September 2002 after 20 years at General Electric, most recently as CFO of GE Lighting. We think Amazon's management team is exemplary in terms of corporate stewardship.  Read more 

Profile

Amazon is the world's highest-grossing online retailer, with $74.5 billion in net sales in 2012, or 7% of the $1 trillion global e-commerce market. Media represented 29%   Read more 

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