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In what timeframe? Every quarter? Amazon is in it for the long haul and will likely make shareholders a lot of money in the end.

hnnewguy 12y ago
>Amazon is in it for the long haul and will likely make shareholders a lot of money in the end. I like Amazon, and also assume that they'll actually make money at some point, but the financial graveyard is filled to the brim with companies like this.
- deleted 12y ago
  [deleted]
  - adventured 12y ago
    They do have a big problem making money. When someone says "to make money" they do not mean to generate sales, they mean to generate profit. Amazon operates on a 1% operating income basis. They are unable to "make money" with their business as it's structured today.
  - throwaway5752 12y ago
    I like Amazon and agree with your other points, but making money refers to bottom, not top line. They lost money.
adventured 12y ago
They've already made shareholders a lot of money. Future returns have been pulled forward substantially. The stock should have been sold by now, the returns to be had on the stock are in the past. Even being generous and giving Amazon a future 20 pe ratio, at the recent highs, would require roughly $9 billion in profit. Once again being generous and assuming they can ever reach a 5% net income margin, they need $180+ billion in sales. Let's recalculate for a 15 pe ratio and 3.5% net income margin: $342 billion in sales (that's the Walmart scenario). The stock has nowhere to go for a decade from the recent $400x levels. The party is over.
- mendozao 12y ago
  I appreciated this quick analysis. Do you have any book recommendations that describe your method/calculations/thought process in more detail? Thanks in advance
- brwnll 12y ago
  I'm confused why you would tie Amazon's future, an eCommerce company who also has a strong cloud (AWS) and digital media division and a growing hardware division (Kindle, Fire) to a brick and mortar retailer such as WalMart. Even discarding all other revenue streams, you want to compare the company to a retailer growing sales at 1% y/y (WalMart), while they grow sales at 22%? All this while only being in 12 international markets and citing a lack of non-English content as holding them back in the high margin area of digital content. Your evaluation seems entirely misguided and ham-handed to be honest.

hnnewguy 12y ago

>Amazon is in it for the long haul and will likely make shareholders a lot of money in the end. I like Amazon, and also assume that they'll actually make money at some point, but the financial graveyard is filled to the brim with companies like this.

deleted 12y ago
[deleted]
- adventured 12y ago
  They do have a big problem making money. When someone says "to make money" they do not mean to generate sales, they mean to generate profit. Amazon operates on a 1% operating income basis. They are unable to "make money" with their business as it's structured today.
- throwaway5752 12y ago
  I like Amazon and agree with your other points, but making money refers to bottom, not top line. They lost money.

adventured 12y ago

They've already made shareholders a lot of money. Future returns have been pulled forward substantially. The stock should have been sold by now, the returns to be had on the stock are in the past. Even being generous and giving Amazon a future 20 pe ratio, at the recent highs, would require roughly $9 billion in profit. Once again being generous and assuming they can ever reach a 5% net income margin, they need $180+ billion in sales. Let's recalculate for a 15 pe ratio and 3.5% net income margin: $342 billion in sales (that's the Walmart scenario). The stock has nowhere to go for a decade from the recent $400x levels. The party is over.

mendozao 12y ago
I appreciated this quick analysis. Do you have any book recommendations that describe your method/calculations/thought process in more detail? Thanks in advance
brwnll 12y ago
I'm confused why you would tie Amazon's future, an eCommerce company who also has a strong cloud (AWS) and digital media division and a growing hardware division (Kindle, Fire) to a brick and mortar retailer such as WalMart. Even discarding all other revenue streams, you want to compare the company to a retailer growing sales at 1% y/y (WalMart), while they grow sales at 22%? All this while only being in 12 international markets and citing a lack of non-English content as holding them back in the high margin area of digital content. Your evaluation seems entirely misguided and ham-handed to be honest.