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Message
AMZN down 15% after hours
Posted on 10/25/11 at 3:48 pm
Posted on 10/25/11 at 3:48 pm
7
Posted on 10/25/11 at 3:59 pm to Tiger JJ
Operating income was down because of investments on planned sales reaching over 21 million Kindles next year. It seems to me that Revenue was on target but the added infrastructure with capacity upgrades is why the earnings are down. I think with Christmas coming around it might be a good time to average down and go long for a year or two.
Something to remember. The Kindles sold out fast and were on back order last year. I see this as a good sign by management that they will be ready this time.
Something to remember. The Kindles sold out fast and were on back order last year. I see this as a good sign by management that they will be ready this time.
This post was edited on 10/25/11 at 4:04 pm
Posted on 10/25/11 at 4:21 pm to Tiger JJ
And yet Amazon is still overvalued to extreme bubble levels. It's a funny stock.
Posted on 10/25/11 at 5:07 pm to Interception
After digging to figure out what all goes into fullfillment costs, would have to agree with you. Surprised by the stock reaction given how people tend to be ultra-focused on revenues and those continued to grow at a rapid clip (44%) and OCF grew at 20%. FCF is down a bit for obvious reasons, and the Fire appears to be the tickle me-elmo of 2011...doesn't seem like a reason for the "big boys to pin it."
Posted on 10/25/11 at 5:18 pm to Tiger JJ
Don't own but I love Amazon. It's awesome with amazon prime and I get it free since I'm a student. Order 3 to 6 things a month off amazon.
Posted on 10/25/11 at 9:02 pm to kfizzle85
Makes me want to get in
Posted on 10/25/11 at 9:03 pm to wegotdatwood
This is probably tacky, but I made a Amazon wish list to help out the parents and family with Christmas gifts. I gave plenty of options. Now that might take the spirit out of it, but I know I wish people did that for me. That would save me from gift cards and phone calls.
My point is, I love the site. Use it all the time.
My point is, I love the site. Use it all the time.
Posted on 10/25/11 at 9:17 pm to Chad504boy
Pathetic operating margins.
Scattershot guidance.
Shipping costs growing two times faster than shipping revenue year-over-year.
Choose one.
At some point, the market looks to profits instead of revenue growth. Think Amazon is there.
Scattershot guidance.
Shipping costs growing two times faster than shipping revenue year-over-year.
Choose one.
At some point, the market looks to profits instead of revenue growth. Think Amazon is there.
Posted on 10/25/11 at 9:18 pm to The Easter Bunny
Like almost all tech-y companies, the valuation in just stupid, but I personally don't see any reason (on the surface) to justify a drop of 15 percent, assuming you're cool with holding a firm trading at a forward P/E of 69. That makes NFLX/AAPL/GOOG look positively cheap.
Posted on 10/25/11 at 11:11 pm to Gorgeous
quote:
Shipping costs growing two times faster than shipping revenue year-over-year.
What shipping revenue? I always go for the free shipping.
This post was edited on 10/25/11 at 11:12 pm
Posted on 10/25/11 at 11:42 pm to Gorgeous
quote:
Pathetic operating margins.
Compared to what?
quote:
Scattershot guidance.
The guidance is definitely hilarious.
quote:
Shipping costs growing two times faster than shipping revenue year-over-year.
Where do you see shipping costs and shipping revenues broken out?
quote:
At some point, the market looks to profits instead of revenue growth. Think Amazon is there.
CFO grew 19 percent, I would say that is more important than net income regardless, but especially so given the info regarding expansion/fullfillment costs. Its a growth company and priced as a growth company, revenue is still king.
This post was edited on 10/25/11 at 11:47 pm
Posted on 10/26/11 at 12:02 am to Tiger JJ
Kindle is a stealth product. Amazon could give it away and still reap profit for years to come on the sale of its proprietary content. Smart move even if the rollout costs make for a bad quarter.
Posted on 10/26/11 at 12:23 am to Layabout
even being down 15% amzn is way overbought for the net income they produce. its just a matter of time before this stock go way down. a 100bil market captial producing only 63mil net income for the quarter? amzn operates on a very minimal profit margin. for their profit margin to have any significant increase, the revenues would have to be up exponentially on a yearly basis.
Posted on 10/26/11 at 12:26 am to kfizzle85
quote:
assuming you're cool with holding a firm trading at a forward P/E of 69
This is why I will take a wait and see approach then begin buying the bottoms. Amazon getting into the "cloud" business is going to be an important part of their growth strategy moving forward. Still, I am cautious about any company with a freaking P/E of 69,
Posted on 10/26/11 at 1:30 am to Tiger JJ
Aren't they selling the Kindle Fire at $10 less than cost? What do they expect?
Posted on 10/26/11 at 2:20 am to Interception
quote:
Amazon getting into the "cloud" business is going to be an important part of their growth strategy moving forward.
Amazon is not just 'getting into' the cloud business. They are the pioneers when it comes to cloud computing and got into it in the very early stages (around 2006) when the industry was starting to take off. They are easily the biggest and most popular cloud services provider currently. When it comes to Infrastructure as a Service (IaaS), nobody can touch them with their Amazon Web Services and EC2 service. It is interesting that among the 3 big players Amazon, Google and Microsoft, Amazon has gone the way of IaaS. While Google (Google App Engine) and Microsoft (Windows Azure) have gone in s different direction with the Platform as a Service (PaaS) model.
This post was edited on 10/26/11 at 4:11 am
Posted on 10/26/11 at 5:50 am to rickgrimes
Didn't mean to lead on that they were new to the industry in any sort of way. I think everyone knows they are cutting edge and ahead of the game when it comes to cloud computing. As far as the details, I have no freaking idea the differences between EC2 services, lasS and PaaS platforms though. I'll have to research that, thanks.
This post was edited on 10/26/11 at 5:53 am
Posted on 10/26/11 at 9:31 am to lsu xman
quote:
even being down 15% amzn is way overbought for the net income they produce. its just a matter of time before this stock go way down. a 100bil market captial producing only 63mil net income for the quarter? amzn operates on a very minimal profit margin. for their profit margin to have any significant increase, the revenues would have to be up exponentially on a yearly basis.
Yes, this is precisely what the market is pricing it at, exponential revenue growth on a yearly basis. A 6 period CAGR including the LTM period @ 9/30/11 of 27% is pretty exponential growth for an already massive company.
Is it still overpriced by a wide margin Absolutely, but its not crashing on its on volition. Its priced as a growth stock, the value in holding it is capital gains. When revenue growth presumably eventually slows the capital appreciation will slow and the multiples will naturally shrink. A good example of a company at this point right now is CSCO. It'll happen eventually, you just might be watching it for a decade before it happens.
Posted on 10/26/11 at 9:32 am to kfizzle85
No business model should strive for a 0.7% operating margin. Margins were pathetic compared to historical performance and other e-commerce corporations(though Amazon has no true comp). A company with the branding and scale of Amazon shouldn't be fighting to break even.
Shipping costs and revenue are broken out on page 21 of the 10-Q. Of course, Amazon's shipping costs are always going to be higher than shipping revenue due to the myriad of promotions they run (Free shipping for $25+, year-long student and mother trials for Amazon prime, etc). But net shipping costs as a % of revenue increasing nearly 30% YoY is concering.
Cash flow is definitely more important than income. But to explain why it dropped 10%+, the market is severely punishing momentum stocks (Netflix, First Solar, Green Mountain) that aren't meeting revenue and growth estimates.
Shipping costs and revenue are broken out on page 21 of the 10-Q. Of course, Amazon's shipping costs are always going to be higher than shipping revenue due to the myriad of promotions they run (Free shipping for $25+, year-long student and mother trials for Amazon prime, etc). But net shipping costs as a % of revenue increasing nearly 30% YoY is concering.
Cash flow is definitely more important than income. But to explain why it dropped 10%+, the market is severely punishing momentum stocks (Netflix, First Solar, Green Mountain) that aren't meeting revenue and growth estimates.
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