As Amazon reported earnings disappointing earnings Thursday –  Amazon earnings were down 77% on more spending than was expected and it forecast a quarterly loss for the first time in two years – the whisper question made the rounds: at what point does Wall Street look at the stock with a 257 price/earnings multiple find gravity? With its purchase of Whole Foods lining the pocket of Jana Partners, who had purchased the firm before the acquisition was announced and campaigned for an acquisition, Amazon is putting something on display that is more than a retail strategy. In fact, retail might not even be the most significant component of the Amazon success story.

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Amazon Earnings – Jana’s Barry Rosenstein likes Jeff Bezos

When Jana’s Barry Rosenstein initially expressed interest in Whole Foods Market, CEO John Mackey called the interlopers “greedy bastards” because the activist hedge fund wanted to find a buyer for the firm. That buyer came in the form of Amazon CEO Jeff Bezos.

After the deal was announced and Jana later cashed out, it was to the tune of nearly $300 million in profit for the hedge fund’s 8.2% stake. Nearly a 40% return on investment is not bad considering Jana only held the investment for little over three months.

While the initial public conversation centered on the practicality of Amazon integrating the stores into its retail distribution model, the question of how any stock could possibly garner such a high price/earnings multiple in the traditionally low-margin retail world persisted. But it also raised a question: Is Amazon more about creating a channel to a wealthy target audience? Is this where one real value in Amazon might be found?

Is Amazon Prime a major component of why its stock P/E is so high?

From some respects Amazon is very much like Donald Trump: The company could shoot an analyst on Fifth Avenue and continue to command a sky-high price/earnings multiple.

After Amazon earnings came in worse than expected, Macquarie’s Benjamin Schachter could do nothing but tri[p over himself to paint a positive picture: “The good news is that AMZN has a significant amount of opportunities still ahead of it,” he wrote, affording the stock an outperform rating.

“Given accelerating growth and long runway in both retail and cloud — along w/AMZN’s track record — we believe many investors will look beyond lower near-term profitability,” JPMorgan analyst Doug Anmuth gushed.

There are some questions that apparently are not worthy of consideration. For instance, assuming retail profit margins persist, at what stock price level will Amazon be required to grow in order to justify a price/earnings ratio near 257?

This didn’t seem to matter to Goldman Sachs analyst Heath Terry who liked the stock despite the headline of Amazon earnings miss.

“We continue to believe that we are in the early stages of the shift of compute to the cloud and the transition of traditional retail online and that the market is underestimating the long-term financial impact of both to Amazon,” Terry said after Thursday’s earnings surprise, setting a $1,275 price target. “As Amazon continues to generate high cash returns on cash invested despite the growing scale of its investments … we believe growth acceleration like that we saw in 2Q is likely to continue.”

The real value may be found not in its takeover of retail, a low margin business that likely would never justify a such a high price multiple, but rather in its Prime membership subscriber base. “More people have Amazon Prime than vote, go to church or subscribe to cable,” New York University Professor Scott Galloway told Bloomberg. “Amazon has a pipe into the wealthiest households in the world,” where the subscription renewal rate is estimated at upwards of 90%, even though the company holds these details close to its chest.

Creating a dominant connection with wealthy households could be one of the little discussed reasons to justify the sky-high Amazon stock price. This is typically a higher profit margin channel than traditional retail where a host of services can be offered.

However, after the Amazon earnings miss, the story could start to loose its luster.