Today (Thursday) after closing bell, Amazon.com (Nasdaq: AMZN) revealed Q4 earnings that missed analysts' aggressive estimates that growth would increase 238% from a year prior.
Instead, AMZN earnings per share came in at $0.51 on sales of $25.59 billion, $0.15 below the consensus $0.66 per share on sales of $26.06 billion.
There are a few reasons why Amazon's miss today should actually signal a buy for investors.
First, Amazon has missed nine of the last sixteen quarters; in Q3, revenue fell year over year, breaking a three-quarter streak of rising revenue.
Yet, AMZN investors have seen the stock go up more than 40% over the last year.
Second, today's earnings actually still represent a 148% increase in EPS from a year ago - $0.21 per diluted share in Q4 2012 versus $0.51 per diluted share in today's Q4 2013.
Third, for the full year of 2013, net sales increased 22% to $74.45 billion, compared with $61.09 billion in 2012. Amazon reports that the number actually would've been a 24% increase, if not for the negative impact from year-over-year changes in foreign exchange rates.
In Q4 alone, net sales increased 20% to $25.59 billion in the fourth quarter, compared with $21.27 billion in fourth quarter 2012.
Note: The Fed's 2014 taper means volatility lies ahead. But there's still a way to find profits in a volatile market - just start with this strategy...
Fourth, Amazon announced a record-setting holiday season for Amazon Prime (it didn't provide numbers). In December, Prime became so popular that Amazon was forced to limit new Prime membership signups during peak periods for the first time ever.
AMZN stock is paying the price for missing earnings - it's plunged over 8.5% in after-hours trading, from a close of $403.01 to $369 as of 4:55 pm EST.
But the Amazon stock drop creates a unique opportunity for investors to get in on this company at a discount.
Here's why Amazon is still one of the best investments of 2014...