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It could mean that, but in Amazon's case it means they are reinvesting all of their earnings back into new internal investments, which leads to small annual pro
by cybersol 9y ago
It could mean that, but in Amazon's case it means they are reinvesting all of their earnings back into new internal investments, which leads to small annual profits.
- austincheney 9y agoIn that case is the high value still justified speaking strictly in terms of revenue alone?
- stordoff 9y agoAlso not an investor, but intuitively reinvesting revenue to grow future revenues seems more valuable than being profitable without taking steps to (substantially) grow revenues. Can anyone to speak whether this intuition is reasonable or not?
- _rpd 9y agoExactly. Profits lead to dividends, but also to taxes. As an investor, it is preferable to reinvest and keep growing the business. The trick is that mature companies have a very difficult time achieving double digit growth. Amazon (still) doesn't have that problem.