NEW YORK ( TheStreet) -- Amazon (AMZN - Get Report) investors can be forgiven for believing profits are inconsequential. Year after year Amazon has successfully sold the idea that when they finally do push some of the top line down to the bottom line it's "going to be astronomical."Eighty-four is the number that should burn inside the head of anyone considering picking up this ticking time bomb. Amazon's price-to-earnings multiple is 84. Historically, stocks with a price-to-earnings ratio of over 20 don't perform above average. Currently the S&P 500-tracking SPY (SPY) has a multiple of about 15.5.
Amazon: No Such Thing as Free Shipping
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts