Amazon Stock

[drewtam]

According to Google finance and related reports
current price = $230.81
P/E = 282   

2011 Revenue = $48B 
2011 Income before tax = $0.9B 
2011 profit margin before tax = 2% 



2Q2012
Rev = $12.8B
Inc bf tax = $0.15B
profit margin bf tax = 1.1% 

3Q2012
Guidance is to increase revenue, and lose money for the quarter. Making income before tax, year over year, worse.


Why does this stock defy gravity???

The only thing I can figure, is if they cut their R&D in half the profit margin would jump to a more respectable 5-7%. But even then, that is not very good. And even a blue chip can't cut its R&D deeply to maintain profit margin.

Also, it is a low debt company. But that doesn't make up for the super thin margins in my mind.

When do investors expect Amazon to start turning a profit?
Why are such super thin margins acceptable?
Is this a bubble stock?
Will market irrationality outlast any effort to fund short calls or even long puts?
Am I just a finance noob missing something really obvious? All the analysts say "buy".

[brimic]

Wow, the numbers actually makes Facebook look like a good stock in comparison:rofl: