Amazon's Stock Looks Like a Bargain. Here's Why It's Time to Buy
Even though Amazon (NASDAQ: AMZN) has had an incredible start to the year (its stock is up 25%), it's nowhere near its historical valuation levels. That means there may be a lot of upside left in the stock. Considering that Amazon reported a mediocre quarter, the business hasn't returned to its full potential, causing many investors to lose confidence in the stock.
I think this is a mistake, as most of Amazon's headwinds are temporary. The long-term trajectory for Amazon is still positive, and I think there are a few key reasons why investors should consider the stock right now.
After Amazon became the go-to e-commerce store during the height of the pandemic, it spent heavily on building out its fulfillment infrastructure to satisfy the demand. However, people reverted to their usual in-person shopping habits after the risk subsided, which left Amazon with too much warehouse space and extra employees. This caused free cash flow (FCF) to drop into the outflow territory, meaning Amazon burned loads of cash each quarter.
Source Fool.com
