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re: Twitter IPO
Posted on 11/8/13 at 11:42 pm to FootballNostradamus
Posted on 11/8/13 at 11:42 pm to FootballNostradamus
quote:
I read something the other day where Amazon would have to increase its revenue something insane like a hundred-fold to validate its stock price.
No, Amazon's price/sales ratio is only 2.24. Compared to Wal-Mart at 0.53, or Costco at 0.51, it seems a little high, but not abnormally high considering Amazon is growing revenue at 20%+ and the other two are barely growing at all.
You might mean Amazon needs to increase its earnings 100 fold, which would be closer to the truth, but not nearly the insurmountable task it sounds to be. I have discussed this here before and won't go deep into it again, but basically Amazon is putting any and all would-be profits into growth, and will continue to do so for the foreseeable future. There is absolutely, positively no reason for Amazon to show a profit until their growth slows down, and in turn the growth investments slow down. Whether that will take 5, 10, or 20 years is anybody's guess, but there seems to be little reason Amazon can't get as big or bigger than Wal-Mart.
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
2
Posted on 11/9/13 at 12:16 am to Korkstand
quote:
You might mean Amazon needs to increase its earnings 100 fold, which would be closer to the truth, but not nearly the insurmountable task it sounds to be. I have discussed this here before and won't go deep into it again, but basically Amazon is putting any and all would-be profits into growth, and will continue to do so for the foreseeable future. There is absolutely, positively no reason for Amazon to show a profit until their growth slows down, and in turn the growth investments slow down. Whether that will take 5, 10, or 20 years is anybody's guess, but there seems to be little reason Amazon can't get as big or bigger than Wal-Mart.
Yea I know they're reinvesting everything, but it still seems too high for me unless they really start hitting the international markets (which they are now).
quote:
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
Yea I remember that thread. I used to be extremely high on them, but upon further research I thought against investing in them.
I guess I was wrong hahaha.
Posted on 11/9/13 at 12:31 am to Korkstand
quote:
Actually, I just found the AMZN thread from April, and you posted in it. Realizing now I should have bought some at $260 in April when I was singing their praises.
They wouldn't have been a bad purchase at all, but the entire market is up at record highs right now so ~30% wouldn't be anything to run around naked about.
I have no doubt over the next couple of years Amazon will likely increase. My question for them is over the longhaul. I think they will either start to flatline a bit as far as their stock is concerned if they can't increase earnings to meet their crazy P/E ratio, or they will continue to grow, essentially revolutionize how we view online consuming and turn into the next Coke/Exxon as far as investments come.
I might throw a couple grand at them just because I love the company so much haha.
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