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Your analysis seems to ignore a fundamental number - the Price/Earnings ratio. Looking at a forward PE, which is a number that help drive stock prices, Apple is
by sxcurry 14y ago
Your analysis seems to ignore a fundamental number - the Price/Earnings ratio. Looking at a forward PE, which is a number that help drive stock prices, Apple is around 10 and Amazon over 100. No matter what you thing about Apple vs Android, etc, this fundamental valuation number is way out of whack for Amazon. BTW, I hold Amazon stock and think it's a great company.
- rednukleus 14y agoForward P/E only looks at expected profit over the next 12 months, which is likely to be very high for Apple, and very low for Amazon. The big question is, what will the situation be in 5, 10, 20 years?
- YZF 14y agoForward PE is a guess. Amazon has shown it can sell a lot of stuff at a loss. Guess what, so can I. Apple has shown it can sell stuff with huge profits. That was the past. In the future- who knows...
- 18pfsmt 14y agoI'm not sure what you are talking about, but the Price:Earnings ratio is not a guess. It is based on past SEC filings. To suggest as much indicates a significant lack of understanding on your part, and I am really not sure what business you have discussing this topic with anybody. Edit: I realize that Forward P/E is different from P/E, but various analysts use various numbers for Forward P/E, so it is not a definitive metric in the first place.
- YZF 14y agoThe comment above spoke about "this fundamental valuation number" regarding FORWARD P/E. Forward P/E is a guess (== varius analysts use various numbes == Almost always wrong sometimes in a major way). That's why I made the comment. I understand perfectly well what P/E is. EDIT: Companies also manipulate E in various ways so even though P/E is supposedly not as fictitious as forward P/E you also have to be careful with that number.