Shares of Amazon.com (AMZN) fell more than 11% to $316 and change in pre-market trading Friday after the e-commerce giant reported a second quarter net loss of 27 cents per share, compared to an expected loss of 15 cents a share. Following the earnings report RW Baird lowered its price target on the stock to $400 from $410, citing concerns about the company’s margin compression and Q3 guidance. Amazon said it expects its Q3 2014 operating losses to fall between $810 million to $410 million, compared to the $25 million loss in Q2 2013.
RW Baird’s target price reduction suggests a potential downside of 10.40% from the stock’s previous close. Amazon shares closed at $358.14 on Thursday afternoon ; the stock is down more than 12% from its 52-week high set on January 22, 2014 of $408.06.
AMZN has been the subject of a number of other recent research reports. Analysts at Raymond James lowered their rating on shares of Amazon from ‘Outperform’ to ‘Market Perform’ in a research note on Friday. Analysts at Citigroup (C) also lowered their rating on AMZN from ‘Buy’ to ‘Neutral’.
Amazon shares, which currently have an average 3-month trading volume of 4.1 million shares, trade at a trailing-12 P/E of 500, a forward P/E of 99 and a P/E to growth ratio of 8.70. The median Wall Street price target on the company’s stock is $420 with a high target of $500.
In terms of profitability, Amazon’s trailing-12 profit margin currently stands at nearly 0.38% while operating ones are at less than one percent. The $147 billion market cap retailer reported $8.67 billion in cash vs. $3.15 billion in debt in its most recent quarter.
Amazon.com operates as an online retailer in North America and internationally. The company was founded in 1994 and is based in Seattle, Washington.