Amazon Still Spinning Its Wheels as Markets Await Fourth Quarter

What Happened?
Online retail giant Amazon.com (AMZN) held its annual meeting for analysts Tuesday in Reno, Nevada. Chief financial officer Warren Jenson emphasized the company's new emphasis on fiscal responsibility and highlighted its best-performing units, particularly its home electronics store.

What It Means for Investors
While management made positive statements and provided some new figures during the meeting, most of it was a rehash of what Amazon has been saying for the past nine months. The company has been talking about increased efficiency and the need to start cutting its losses since the beginning of this year, but so far results have been mixed. Jenson did stress Amazon's focus on improving inventory management, a previous sticking point that will be a key factor in any move toward profitability, but he gave few hard numbers.

We think the real test for Amazon will be its performance in the fourth quarter, in terms of both revenue growth and reducing losses, and not much is likely to happen before then. Despite the company's rough summer, its stock is still rather pricey, and investors who buy it now are basically gambling on Amazon's performance over the next four months.