Amazon.com stock, which hit a record high of $368.40 Friday, is ultimately going to $400, says Stifel Nicolaus analyst Jordan Rohan.

With a price-earnings ratio of 1,317, according to Yahoo, Amazon looks mighty overvalued, its critics say.

But Rohan cites a different metric to backup his projection. He notes that Amazon trades at 1.4 times its annual sales, well below other retailers. "You have plenty out there that trade at two or three times sales," Rohan tells CNBC. 

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

"To me, this isn't such a bubble valuation. I think this is valuation that's underpinned by strong fundamentals, a dominant position, perhaps the most durable franchise."

Amazon's revenue jumped 24 percent in the third quarter to $17.1 billion, but it suffered a net loss of $41 million in the period.

The company's retail dominance should last for a while, Rohan says. "Do you really think Amazon's going to be supplanted by anybody else?" he asks. "Amazon's further ahead of its peers today than it was a year ago, three years ago or five years ago."

Google and Apple are the only potential challengers for the company, Rohan says.

"These are things that could take some of the edge off of Amazon, some of the reasons for buying it, a little bit of the shine," he notes.

"At the end of the day, Amazon's in a great position to compete against traditional retailers for structural reasons," Rohan adds. "I just don't know how easy it is for someone to compete with them."

Henry Blodgett, editor-in-chief of Business Insider, was bullish on Amazon as a Wall Street analyst in the 1990s, and he continues to praise the company today.

"If more companies behaved the way Amazon does, reinvesting more of their earnings, putting customers and long-term value creation ahead of near-term profit, the U.S. economy would be much better off," Blodgett writes in an article for Business Insider. 

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