They're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.
Only 20% is why the stock is down after hours, at 100 P/E AMZN is speculatively priced where they're expected to achieve infinite growth until they deliver financials that justify their valuation which Investors are betting on to happen before they hit any growth ceiling. There's also no room for an economy downturn which expensive stocks like AMZN are extremely volatile to.
Growing 20% at Amazon's size is why the stock is worth so much. Almost all companies have slowed down long before this point. Amazon is still growing like a late stage startup. It's really a remarkable feat.
Are Facebook, Google, Microsoft also still considered late stage Startups?
FB Growth 28% YoY, P/E 26.51, Mkt Cap 573B
GOOG Growth 19% YoY, P/E 25.90, Mkt Cap 788B
MSFT Growth 12%, P/E 27.69, Mkt Cap 1.07T
They all have a much more reasonable P/E. Agreed that it's harder to achieve growth from a massive base, but they're also priced from being able to continue doing so much better than their competitors.
> Yes, but now look at their growth as well and you'll understand Amazon's valuation is not wholly out of line.
Then please lay out your understanding of what justifies AMZN's price in your eyes as you've yet to quote a single figure.
The only reason why WMT's P/E is so high (and their Market Cap doubled in since 2016) is because of their success in their e-commerce business which saw 37% growth YoY.
You've been saying AMZN is a retail business whose financials can't be compared to Tech stocks which is clearly untrue, AMZN's retail business is less than 1/2 the size of Walmart yet they're worth 3x more who would've been worth even more if they didn't give out dividends which AMZN can't dream of doing at their current valuation.
It's not untrue, Amazon is largely a retail business and you can't compare it's P/E to tech socks, that'd just be silly. You clearly know enough to know that, so I don't get why you insist.
As for producing the numbers on the YoY for the retail companies you listed - I hope somebody else does that. I'm busy.
AWS accounts for their largest profits, growth and margins, their financials would be even worse if you compared them against retail stocks which are high capital intensive and low margin businesses, there's no way AMZN is valued as a retailer which would make their valuation even more insane.
Amazon is valued based on the implicit assumption that Bezos is a Buffet tier investing genius. So far, that assumption has held. The main difference is that Bezos invents new businesses in addition to buying them. Nobody is arguing that retail isn't a big part of their business, but it was only ever meant to be the bootstrap. It's incredibly rare to see such executive and entrepreneurial skill combined in the same individual.
Yes, this is my take on it as well. They're betting he can keep growing at 20% for many years to come, which would be almost unprecedented for a company of that size and age.
You've presented a concise and valid set of statements that argue that a 100 P/E ratio might be expensive, but don't justify calling it insanely expensive.
This is a good idea. Stop the stock game and just pay a set base salary = to comp + stock.
But we can’t do that because that would take all the fun out of seeing part of your potential income fluctuate with the whims and buffoonery of Wall Street.
Shareholders own companies and a rising stock price benefits shareholders who elect the board members that run said company, a falling stock price isn't in anyone's interest who are invested in the company.
It does help with M&A, raising capital, employee stock options + bonuses.
It's rare, but sometimes you'll hear company Investors saying that their stock price is too high, like Zoom's CEO [1].
