) to sell from hold, citing doubts about the company's aggressive spending on technology and content.
Analyst Mark Mahaney said the company's year over year organic revenue growth rose from 24% in June to 25% in September, but operating margins plummeted to 5.9%-- their lowest level since September 2002. He says that Amazon's Tech & Content (T&C) costs were the main culprit. He believes aggressive T&C spending and shipping promotions imply limited near term margin expansion with uncertain long-term payoffs, and thinks Amazon's international revenue growth is decelerating markedly. He thinks Amazon trades at an unwarranted premium to eBay, and cut his 60 cents 2005 earnings per share estimate to 58 cents, his 82 cents 2006 estimate to 78 cents, his 97 cents 2007 estimate to 96 cents, and his $39 stock price target to $38.