Although Amazon (NASDAQ: AMZN) shares crushed the Nasdaq Composite lately, rising 64% so far this year, they're still 26% below their all-time high from more than two years ago. The current price-to-sales ratio of 2.6 is also a substantial discount to the average valuation of the past five years.
There might still be an opportunity here. But is Amazon stock a buy right now? Let's look at arguments for and against owning shares.
Investors should immediately be drawn to owning Amazon because it has a wide economic moat that protects it from the constant threat of competition. The company's online marketplace, which accounts for nearly 40% of all e-commerce sales in the U.S., benefits from network effects. Merchants want to set up shop on the platform because of the massive global customer base and traffic (amazon.com had 2.8 billion visitors in the month of July). And consumers, seeking low prices, a huge selection, and fast delivery, don't think twice when considering where to shop first. The site gets better for both merchants and consumers as it gets bigger.
Source Fool.com