AMZN) is one of the most valuable megacap companies on the Nasdaq exchange. The firm commands a high premium valuation because of its demonstrated record of consistent sales growth. However, it almost always appears grossly overvalued when using earnings-based valuation methods.
Amazon pursued a strategy of reinvesting most of its profits into the business. This strategy allowed the company to expand faster, and it also minimized taxes. As a result, traditional measurements of value often fail when applied to Amazon.
