NEW YORK (TheStreet) -- While I have never believed that there is such a thing as a "perfect stock," I have always remained cautious at stocks that I believed are "priced for perfection."

Investors are often quick to throw valuation metrics out of corporate windows in favor of "zeal," a quality that flies in and attaches to

names such as


(CMG) - Get Report


(CRM) - Get Report

and to a lesser extent virtualization king


(VMW) - Get Report

. These are examples, of stocks that by virtue of their enormous trading multiples that fit the description of "priced for perfection."

As great as it is for these companies to have earned such favor and high praise from Wall Street resulting in high flying stock prices, one misstep can be severe -- if not entirely catastrophic. After all, one cannot spell "perfect" without P/E and several of these names sport ratios that offend value investors -- myself included. As fundamentally sound as e-commerce giant


(AMZN) - Get Report

continues to prove that it is, I have recently decided that by virtue of its P/E of 143 it now merits a ranking among the "perfect." The question is, should there now be cause for concern?

Perfect Problems

Amazon is without question one of the best tech stories today. It is a wonderful company with one of the top three visionary CEOs in Jeff Bezos. But the stock is expensive -- there is no way to spin this. I have never been a fan to the so-called "premium pricing." I will concede that it has never served as an impediment to growth stocks like Amazon. The question for "perfect stocks" has always involved the challenges with growing into the valuation.

In its Q4 report, the concern for Amazon seems to be its growing expenses and what appear to be shrinking margins. The company has always demonstrated a commitment to tackle new markets and seek growth opportunities. To that end, it had taken on facilities expansion in an effort to provide broader ranges of entertainment delivered over its new Kindle Fire tablet as well as the launching of its movie-streaming Prime service to compete with


(NFLX) - Get Report


Why Amazon's Jeff Bezos Is a Genius >>

The stock (then) took a pounding on the announcement. Wall Street wants growth and lots of it. But it seems that many analysts as well as investors do not appreciate the fact that such tremendous growth comes at tremendous cost. Leading into the company's Q1 earnings report, I was eager to see if Amazon can help avert my concerns of perfection.

The Perfect Quarter

On Thursday,

the company reported Q1 earnings results

that blew away analysts' estimates. The company reported net sales for the quarter of $13.2 billion -- representing an increase of 34% from the $10 billion that it reported a year ago. Consensus expectations for revenue were $12.9 billion. The company said its rise in sales was driven largely by increased demand of the Kindle Fire. Amazon also reported operating income of $192 million compared with $322 million a year ago.

As great as these numbers were, what blew away the street was its EPS -- which came in at a stunning $0.28 cents, four times better than the consensus EPS estimates of $.07.

Amazon: 1.5% Is 'Good Enough' >>

In terms of outlook, Amazon said it expects revenue in the current quarter to grow between 20% and 34%, or to between $11.9 billion and $13.3 billion, which includes the negative impact of foreign exchange movements. Ahead of the guidance, analysts had expected second-quarter revenue of $12.8 billion. That was higher than the midpoint of Amazon's forecast of $12.6 billion.

Overall, I have to say that I was exceedingly impressed with the report and the company was right for having made the significant level of investments in its infrastructure. Essentially, it paid money to grow -- a decision that was met with severe scorn.

Facebook Has No Business Being Compared to Apple, Google and Amazon >>

But today it is clear that the company is feeling a sense of vindication, and rightfully so. The company's goal was to build a system to support its vision of a larger business and in doing so it incurred some diseconomies of scale -- a sacrifice that (I assure you) many companies (going forward) will now look to make.

Bottom Line

As perfect as Amazon must be to maintain its lofty valuation, it seems the company is executing to perfection. Though it often remains in the shadows of


(AAPL) - Get Report



(GOOG) - Get Report

among the best tech names on the market, and even below


(WMT) - Get Report

in terms of reported sales, there aren't many companies the size of Amazon producing the level of growth it has demonstrated.

However, as a value investor, paying premium prices for stocks has always (for me) been a great source of sleepless nights. That said, if the "perfect time" were to arrive, Amazon would definitely rank on a short list of names that I would certainly consider.

At the time of publication, the author was long AAPL.