re: Anemic Amazon: Wall Street Tires Of Jeff Bezos' Aversion To Profit

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It might have explosive growth, but the p/e ratio is just too much for me.

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What difference does a P/E make when Amazon pretty intentionally tries to keep E at $0?

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Is anyone else disturbed by its present valuation? Because I can't get past it.

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I don't think you're understanding how much investment is required to support a 20% growth rate in Amazon's world. They're not like Google or Facebook who can quickly deploy more servers and hire a few people and pull in some arbitrary increase in ad revenue. They're not even like Apple who can simply sell more expensive products, or just buy more capacity from their suppliers. For every doubling of revenue, Amazon actually needs to double their distribution floorspace (or invest in equipment/manpower capable of moving product through their facilities faster), and they have to do it years before it's needed.

Amazon is bringing the tech mindset about growth into Wal-Mart's world, and they are in uncharted territory. Amazon is on pace to match Wal-Mart's revenue in about 10 years... do you have any idea how amazing that is? And if the growth is still there, Amazon still won't be turning profits, and honestly by then I don't think anyone will care anymore. When (if?) the time comes for Amazon's growth to slow, then they will settle into Wal-Mart type earnings and ratios and all will seem right with the world. Amazon's gross profit margins are actually better than Wal-Mart's, and Amazon makes more per employee. Not to mention Amazon is into much more profitable ventures than retail. I also wouldn't be surprised to see Amazon get more into shipping, as well.

It takes a lot to build an empire. Seems to me that people crying for profits and dividends are asking them to fail.