Calling out Mark Mahaney of Citigroup

Not too long ago I had analyzed Amazon.com, and had decided to stay away from the stock eventhough I liked what they did from a customer's perspective.

Within the first week of January, Mark Manahey of Citigroup cited that for 2008, "Margin Expansion alone could drive double-digit EPS Growth". and that, "Mahaney says he sees 10% upside to the Street’s ‘08 EPS estimates for Amazon “driven by stronger than expected revenue growth and margin expansion.”

Let's roll forward to April, in a recent WSJ article, "Mark Mahaney said in a research note that first-quarter gross margins were mixed and that Amazon's forecast suggests that operating margins may not expand this year. "The margin outlook is disappointing," he wrote.

I wonder if he is still holding his $119/share price target. Maybe he will be vindicated sometime in the future and Amazon will hit $119/share someday. It makes me wonder what models he is using to come up with these numbers and what bits of information lead him to believe there woud be expanding margins this year for Amazon.com.

I'll take up Amazon, but not at these current levels.