Amazon Prime Air Expansion Triggers Overvaluation Warnings

Amazon.com Inc (NASDAQ: AMZN) has announced an ambitious expansion of its Prime Air drone delivery service, aiming to cover nearly 500 U.S. cities and towns by the end of the year.

This sixfold increase in service area will enable ultrafast 30-minute deliveries of groceries, electronics, cosmetics, medications, and household essentials to tens of millions of customers.

The company's current Price-to-Sales (P/S) ratio of 3.64 is elevated compared to its historical median of 3.43 and the broader retail industry, signaling that the market is pricing in significant future growth despite Amazon's unprofitable and cash-flow-negative status.