Amazon (AMZN) Stock Falls on Earnings

Shares of (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. operates as an online retailer in North America and internationally. The company was founded in 1994 and is based in Seattle, Washington.

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