From a long-term perspective, I’m a fan of (NASDAQ:AMZN) stock. But it’s worth noting that of late, the Amazon stock price hasn’t done much.

Indeed, over the past year, AMZN stock actually has declined 4%. Three trips above $2,000 per share all have been brief, as the “trillion-dollar curse” has held.

That trading leaves the stock in an interesting, and potentially risky, situation ahead of third-quarter earnings on Thursday afternoon.

After all, Amazon stock fell rather sharply after the company’s Q2 earnings in July. The news in Q3 may not be all that much different. Meanwhile, the Amazon stock price is hardly cheap even after the decline. And a market obviously nervous about growth stock valuations may see any sign of weakness as a reason to sell.

Again, long-term I still like Amazon stock. But traders should see it differently — while long-term investors might hope for an attractive entry point in Friday trading.

The Market Problem for AMZN Stock

Simply looking around the market at the moment, it’s not hard to make the case that Amazon will have a high bar to clear on Thursday.

Investors have punished high-valuation, high-growth stocks. That includes large caps like Netflix (NASDAQ:NFLX). Unprofitable IPOs like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) have plunged. SaaS (software-as-a-service) names like Workday (NASDAQ:WDAY) and Splunk (NASDAQ:SPLK), too, have seen selling pressure.

The long-running argument against AMZN stock has been based on valuation. Even skeptics have to admit that its revenue growth has been impressive. The questions are whether Amazon is buying too much of that growth and whether investors are paying too much for the stock as a result.

The enormous gains in AMZN stock have come in an environment where investors were willing — happy, even — to pay almost any multiple for revenue growth. That environment no longer exists. Some of that change admittedly is priced in, given that Amazon stock has pulled back almost 14% from July (and all-time) highs. But not all of that shift may be embedded in the valuation just yet.

The Amazon Stock Price Isn’t Cheap

Even after the pullback, it’s not as if AMZN stock is cheap. It trades at a whopping 74x 2019 earnings per share estimates. There are reasons why that multiple is so high, and analysts do see 40%-plus EPS growth next year. Still, even 53x forward earnings is a relatively high multiple in any market.

To be sure, I’ve argued in the past that investors can’t value AMZN, or any stock, based solely on a single valuation metric. Amazon earnings are being depressed both by near-term investments and the company’s focus on rock-bottom pricing.

Amazon margins are thin — but they’re thin at least in part because Amazon wants them to be. The company is focusing on market growth over margin expansion, and that’s a decision that makes sense.

From a near-term standpoint, however, investors may no longer be so quick to trust the company’s judgment. That’s particularly true given that third-quarter earnings will see the same pressure that appears to have spooked the market after the Q2 release in July.

One-Day Shipping and Declining Earnings

One key reason why AMZN fell after the Q2 report in July was the company’s guidance for the third quarter. The company guided for operating income of $2.1-$3.1 billion against $3.7 billion in Q3 2018.

The driver was the company’s move to one-day shipping, which hit second-quarter earnings by an estimated $800 million. The effect will linger into Q3, and lead Amazon almost certainly to report a year-over-year decline in profits.

From a long-term standpoint, the one-day shipping move may well pay off. Most notably, it potentially cuts off the omnichannel efforts of brick-and-mortar retailers like Walmart (NYSE:WMT) and Target (NYSE:TGT), who can leverage their store base to provide consumers a wealth of options. And, at this point, I’d be loath to bet against Amazon management.

But from a near-term perspective, the pressure on Q3 earnings does leave Amazon in a potentially dicey spot. This is a market focused on valuation – and the stock price remains dearly priced. Investors are asking for profitability over growth at the same time the company is providing the reverse.

There was a time not that long ago when a year-over-year decline in earnings would have been ignored. In fact, Amazon’s operating income declined by 2% in 2017. The stock price increased by 56% that year. But this is not the same market — and that puts AMZN stock at risk heading into Thursday’s release.

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