After starting off the year with a big move higher, the latest wave of fear and uncertainty has knocked Amazon (NASDAQ:AMZN) lower in recent weeks. With this, like with other FAANG stocks, growth and value investors alike are once again calling a bottom with AMZN stock.

On the surface, the argument some are making about the e-commerce and cloud computing giant may make sense. As the company’s earnings catch up to its valuation, and then some, the stock has the potential to make a major recovery.

However, before this takes shape, there’s a strong chance AMZN continues to move lower. A myriad of issues across all of Amazon’s business units persist and remain far from resolution.

These issues could affect results over the next few quarters and possibly send the stock down to a new multi-year low.

AMZN Stock and the Premature Bull Case

Old-school value investors may continue to consider Amazon pricey by traditional value metric standards. This is true. Based on analyst forecasts calling for earnings of $1.47 per share this year, AMZN currently trades for around 63.5 times forward earnings.

However, one value investor (Gravity Capital Management’s Adam Seessel) considers AMZN stock a bona fide bargain. In an interview with Barron’s, this fund manager laid out the bull case for the stock as a value play.

In a nutshell, Seessel believes that Amazon’s growth runway in e-commerce and cloud computing is much longer than currently expected.

Alongside this, Seessel believes that, as the company matures, and goes into “harvest mode,” its margins will be substantially higher than they are today. Yet while this argument underscores the importance of considering all factors, not just metrics like price-to-earnings (or P/E) ratios, there are two key counters to this argument.

First, while Amazon dominates both the e-commerce and cloud computing segments, competition is rising across both segments. This could affect future growth. Second, and more pertinent to the near-term, like I mentioned above, before this bull case plays out, persistent headwinds stand to knock the stock lower.

Why Shares Could Hit a New Multi-Year Low

Despite the latest pullback, AMZN stock has yet to re-hit its 52-week low of $81.43 per share. Shares today are currently trading in the low-$90s per share. However, a move back down to the low-$80s per share, or to even lower price, may be just around the corner.

As I discussed previously, the current economic slowdown has negatively affected the performance of both Amazon’s e-commerce segment and on its AWS cloud-computing business. This is likely to carry on in the coming quarters, as the Federal Reserve keeps raising interest rates in its efforts to curb inflation.

These macro issues affected results for the last quarter of 2022, and are likely to further affect results for the current quarter. The company is to report these results in late April. Another post-earnings pullback, one that possibly pushes AMZN down to a new multi-year low, isn’t out of the question.

Yes, the sell-side has walked back its Q1 estimates. This may give Amazon the ability to deliver results ahead of expectations. Yet if management’s outlook update confirms recent headwinds will continue through the rest of 2023, investors could bid down the stock in response.

The Verdict

Admittedly, Amazon isn’t resting on its laurels. Rather than ignoring the aforementioned issues, along with long-term threats to its core business segments, the company is currently making the right moves to get back on track.

Amazon has announced plans to lay off over 18,000 employees, but its belt-tightening plans do not end there. It’s even paused the construction of its second headquarters complex, nicknamed “HQ2,” just outside Washington, D.C.

Yet while these moves are steps in the right direction, issues largely outside the company’s control will have a greater impact on its performance. At a high chance of continuing to disappoint earnings-wise for now, shares may soon end up hitting new multi-year lows.

While perhaps worth a second look at lower prices, with AMZN stock, the best move today is to stay away.

AMZN stock earns an F rating in Portfolio Grader.

On the date of publication, Louis Navellier held AMZN. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.