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Amazon Is Now Worth More Than Wal-Mart

294 points by ryanmonroe 11y ago

codemac 11y ago
Is Amazon's wealth more concentrated ( as in just in bezos ) than Wal-Mart (the walton family)? I think it's unfortunate if it is.
- NhanH 11y ago
  That's an odd sentiment. Walmart is more distributed just because Sam Walton was dead. As the time he was alive, it's even more concentrated than Amazon has every been.
- Retric 11y ago
  No really, any two of the walton family's main inherators are worth more than bezos.
- joelrunyon 11y ago
  Why do you say that?
- brentm 11y ago
  The Walton's own a lot more of Walmart, closer to 50%. Bezos less than 20%.
  - krstck 11y ago
    Also, Bezos has far more influence (and responsibility) over Amazon than the Waltons do over modern-day Walmart.
- boomzilla 11y ago
  The Walton family hold a bit more than 50% of Walmart shares. This is by design. As they control the board, they usually make sure that Walmart buys back enough share to keep them in control. Their income are mostly coming from dividend, which amounts to a few billion a year :) It is possible to argue that this basically prevents Walmart from taking risks in more innovative business lines. Jeff Bezos holds less than 20% of Amazon now, but he basically "owns" Amazon for all practical purposes. I'd also say that at least 20% of Amazon valuation is based on Bezos being the CEO/President/Chairman of the Board.
- pmelendez 11y ago
  Most of Amazon revenue is reinvested in the company, so the models are a bit different.
- throwaway6497 11y ago
  Why does it matter? This is probably true for most VC backed companies. Founders have loins share of equity. Why is it unfortunate? This is how VC backed economics work or more generally how capitalism works. Risk takers reap most rewards.
blackaspen 11y ago
This has been writing on the wall for a while. While both companies have their pitfalls, it's certainly interesting to continue to watch e-commerce's rise.
krstck 11y ago
One interesting thing is that Amazon is almost approaching Walmart's bad reputation in terribleness for employees. (Maybe not software devs, but perhaps warehouse contractors.) Is this kind of ruthlessness essential for such a huge company to be so profitable?
- chambo622 11y ago
  I remember reading about Amazon making warehouse employees sign a non-compete agreement - a stipulation that was rather quickly reversed after The Verge and other publications exposed it. What other examples of terribleness have you read about?
  - krstck 11y ago
    There are articles on how horrible the warehouse conditions are. (For example, http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...). Note that I'm not trying to condone that perception, just merely observing that it exists in tandem with Walmart's (whose problems are well-known).
    - Vexs 11y ago
      This came up on reddit a while ago; the general tone of the conversation I got was that it really depends on which warehouse you're working at, some had horrible managers and others had really good working experiences. It's still strange that its like that though.
- xd1936 11y ago
  The crazy thing is, they're not even profitable right now.
  - serge2k 11y ago
    They reported a quarterly profit just yesterday.
- 11y ago
ck2 11y ago
Is it worth more than walmart + walmart.com? I doubt it.
- blackaspen 11y ago
  Walmart.com revenue/worth is a tiny, tiny fraction of the whole Walmart.
- cheald 11y ago
  Is walmart.com owned by a different company?
- SwellJoe 11y ago
  Walmart.com is wholly owned by Walmart (it is merely a division of Walmart, actually, and not a separate entity of any sort), and we're talking about market cap, so...according to this article, Amazon is worth more than Walmart and Walmart.com.
- fahim305 11y ago
  yes the measure they are talking about is market cap, not sales. the market cap for Wlmt includes sam's club, walmart.com, etc. In terms of total sales, Wlmt (including subsidiaries) is close to $500B, while Amazon is approaching $100B. However, Wlmt.com (domestic) is only ~2% of total sales times $288B total domestic sales so only ~$5B sales
theseatoms 11y ago
Not if you include debt, in addition to equity. http://blogs.ft.com/lex-live/2015/07/24/no-amazon-is-not-more-valuable-than-wal-mart/ http://blogs.ft.com/lex-live/2015/07/24/no-amazon-is-not-mor... WARNING: paywall
- MaysonL 11y ago
  I don't know why this is getting down-voted. Amazon's enterprise value is about $220 billion, Walmart's about $275 billion. I.e. Walmart is worth about $50 billion more than Amazon.
fahim305 11y ago
This was a long time coming. 20% growth on a business that is approaching $100B revenue (and probably 2-3x that in terms of GMV, a better measure of its size and dominance), and AWS continues to grow as does the digital side of the business. The crazy thing is that they still have low market share in several of the retail categories that its in (apparel, grocery, several product lines even in home, health & beauty, electronics, etc.) Their achilles heal though continues to be browsability and searching. It is obviously a great place to go if you know exactly what you want, but continues to be a poor experience if you are browsing for an item or don't know what you want. There continues to be duplicate listings for the same items (some listed by 1st party and some by 3rd party), and it is very tough to browse items. Once they actually figure this out and implement, that's when this will really become game over (at least domestically)
- vonmoltke 11y ago
  > Their achilles heal though continues to be browsability and searching. It is obviously a great place to go if you know exactly what you want, but continues to be a poor experience if you are browsing for an item or don't know what you want. There continues to be duplicate listings for the same items (some listed by 1st party and some by 3rd party), and it is very tough to browse items. Once they actually figure this out and implement, that's when this will really become game over (at least domestically) Their catalog is getting so bad that I can't even find things when I know exactly what I want.
- anthony_romeo 11y ago
  One thing I note is that their recommendations aren't terribly smart. I mean, I bought a coffee table through Amazon a few months ago. After buying the table, for several weeks it kept showing me coffee table recommendations. I would think Amazon would be smart enough to try and sell other living room furniture or things to put atop the coffee table I just bought, rather than trying to sell me more coffee tables.
  - _delirium 11y ago
    Their recommendations feel to me like the recommendation engine is still more or less the one they had when they were mainly an online bookstore. So they assume you want things similar to the item you bought: other novels in the same genre, nonfiction books on similar subjects etc. Works fine for books, less well for coffee tables.
fixxer 11y ago
Call me old fashioned, but I "value" profitable companies more than unprofitable ones. Amazon had a net loss of $241m last year[1], while Walmart had a net profit of $16b[2]. [1] http://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual http://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual [2] http://finance.yahoo.com/q/is?s=wmt+Income+Statement&annual http://finance.yahoo.com/q/is?s=wmt+Income+Statement&annual
- SwellJoe 11y ago
  The stock market tends to value growth very highly (probably too highly). Amazon is growing faster than Walmart. Not that I disagree with you on how to "value" a company, but the stock market thinks the expected future growth of Amazon is more valuable than the current profit of Walmart.
- fahim305 11y ago
  profit is irrelevant. their capex is $1B-$2B per quarter. they could lower their capex at any point and show a few hundred million dollars net earnings. the point is that they are as big as they are and continue to invest in the future, and hence the insane p/e ratio and stock price
  - fixxer 11y ago
    Let me know when they can shuffle the books and make 16 billion fall out and I'll stop laughing.
    - pnut 11y ago
      On first read I thought you meant a giant warehouse robot shuffling books like a deck of cards. Let me know when they can do that too.
- crindy 11y ago
  It seems like Amazon is in a position where they could turn a huge profit, they're just choosing to reinvest instead. If they just raised prices by something tiny like 1%, wouldn't their profits become instantly massive?
ryandvm 11y ago
Wal-Mart's Q4/2014 net income was 16,363,000 and they have a P/E of 14.6. Amazon's Q4/2014 net income was -241,000 and they had a P/E of, well, they didn't. I think Amazon has been one of the most innovative companies of the last decade, but Amazon is going to be a much less attractive consumer option as they start transitioning to business models that require them to actually profit. I could steal all the lawn mowing business in town if I were willing to mow lawns for free...
- 3pt14159 11y ago
  Then short sell Amazon and long Wal-Mart. Every time these conversations come up it's always the same thing. One said says profit the other side says to skate where the puck is going.
- mason55 11y ago
  Do you realize that their lack of profit is not because they can't profitably sell things at current price points? The lack of profit is due to reinvestment in the business. It would be more like if you were mowing lawns at a very small profit and using that profit to continually buy more lawnmowers and trucks and eventually investing in developing my own, more efficient lawn mowing technology. Each summer you lose a little money but after 50 years you now are mowing 50% of the lawns in the US and doing it more efficiently than anyone else is capable of.
  - Sherlock 11y ago
    Accounting doesn't work that way. You can have huge profits and reinvest them, but your income statement will show the profits in any case. Yes, Amazon could be more profitable with different price points, but sales would take a hit, and thus their growth prospects. FWIW, I think Amazon valuation is fair.
    - gitah 11y ago
      Software R&D (especially for new initiatives) is typically not capitalized so if a lot of investment is in software than it would show up as operating expenses rather than capex.
kin 11y ago
As someone who shops at both Amazon.com and Wal-mart, this makes me happy. Now, I don't know if their worth translates to more success but all I know is that my experience with amazon is always pleasant and convenient whereas my experience at Wal-Mart is almost always unpleasant and inconvenient.
- _delirium 11y ago
  I have mixed opinions. I find dealing with UPS/Fedex delivery attempts almost as infuriating as dealing with traffic and the Wal-mart store. On other angles: Wal-mart's browsability and prices are better, but Amazon's selection and ability to find specific items are better. In some specific areas the contest is much clearer: Amazon is much better for books, Wal-mart is much better for household supplies, etc.
  - ergothus 11y ago
    I'm in a strange circumstance where the USPS won't normally deliver packages to my house (I'm on a major road). UPS and FedEx both will. The exception is on Sundays, when the USPS normally doesn't deliver to anyone, except Amazon pays them to. On Sunday, they'll deliver packages to my door. So to have true convenience, I actually TRY to get my Prime packages delivered on Sundays. That's just weird.
kumarm 11y ago
I am surprised this is not talked about more: Amazon Full Time Employees: 154,100 Walmart Full Time Employees: 2,200,000 (Based on Yahoo Finance Company Profile Stats) There is a growing need for Human's to work Lesser Hours going forward rather than more Hours.
- jackreichert 11y ago
  Implicit in that is the growing need for humans to support themselves comfortably on fewer hours going forward as well.
- minot 11y ago
  I could argue that fewer people need to work and lean towards a basic income. Sadly, this is not very palatable to most people.
  - seanflyon 11y ago
    I think it would become much more palatable if someone came up with a plan for basic income that didn't require tripling the federal budget.
    - sitkack 11y ago
      Taxing the rich comes to mind.
      - jessaustin 11y ago
        Increasing taxes to fund increased services is exactly increasing the federal budget.
      - afarrell 11y ago
        Parent said "budget", not "deficit".
- _delirium 11y ago
  That difference is partly due to different things being valued: Walmart's valuation is primarily its current business, while Amazon's valuation is primarily its future growth prospects. That future growth is valued in the market cap today, but its actual materialization will only take place in the future, so doesn't show up on the payroll today. If Amazon does actually succeed in growing to Wal-Mart levels of sales, it will end up with a lot more employees than it currently has, though quite possibly still fewer than Wal-Mart.
mullen 11y ago
I just don't understand why Amazon.com stock is so high. Bezos has stated time and time again that he intends for Amazon.com to never make a profit and to never pay a dividend, always folding all of the earnings back into the company for future growth. There is no logic to its value.
- aetherson 11y ago
  Clearly people think that Amazon will take over the world -- literally -- and their only method of influencing their new overlord will be to have shares to vote. That's a joke. Presumably the ultimate belief in the value is either that Bezos will eventually share some value of the company, or that Bezos will retire or die and it won't be his decision, or that stockholders will force a value-sharing over Bezos' objections (he does not, after all, have a majority).
- Zigurd 11y ago
  Never take "never" literally. Never.
- umanwizard 11y ago
  The company can't grow forever in a finite universe. "If something cannot go on forever, it will stop", despite what Bezos says now. Someday Amazon will either be out of business or paying a dividend.
  - deleted 11y ago
    [deleted]
  - exacube 11y ago
    Isn't this true for all companies? And if so, why is this meaningful in particular for Amazon
    - DavidHm 11y ago
      Not necessarily. Amazon aspires to have 100% of market share where it competes, or very close to. Other companies don't aspire to even 50% of market share. See Apple for example. They are happy to have the premium segment locked in and reap the profits out of it.
MaysonL 11y ago
Of course, the headline is wrong. Walmart is worth about $50 billion more than Amazon. Compare their enterprise value, not their market cap.
- dlubarov 11y ago
  So Walmart's operating assets are worth more than Amazon's. I still think the headline is fair. Usually when we speak of a company's value, we mean the entire company including non-operating assets and liabilities.
Animats 11y ago
WalMart revenue: $482bn. Amazon revenue: $89bn. Amazon is only worth its current market cap if it can increase sales by at least 5x. Which it probably can, but it will take some years. Wal-Mart is expanding into grocery stores, with their "Neighborhood Markets". (They mean big supermarkets, not convenience stores. Typical size is 45,000 square feet.) Wal-Mart has 40 square miles of floor space worldwide.
- zanny 11y ago
  And Amazon has pretty much 0, and is valued more. Thats more the market saying that the overhead of having stores, of having staff maintaining them, of maintaining a supply chain to stock them, and all the bureaucracy around that is not worth it. That just having a website and good distribution centers is enough, and Walmart thus has a lot of unnecessary overhead, especially when they have both the stores and their website. There are still a lot of things Amazon does a poor job supplying, and having to pay $200 a year to get quick shipping is a severe stain on their practical use as a walmart surrogate for many people.
  - deleted 11y ago
    [deleted]
  - mbil 11y ago
    > ...having to pay $200 a year to get quick shipping... Amazon Prime (two-day shipping) is $99/year[0]. Are you referring to something else? [0] http://www.amazon.com/gp/product/B00DBYBNEE/ref=gno_joinprmlogo http://www.amazon.com/gp/product/B00DBYBNEE/ref=gno_joinprml...
    - vukers 11y ago
      He might be referring to the next tier up, "Prime Fresh", though I haven't come across exact pricing yet: https://fresh.amazon.com/about https://fresh.amazon.com/about Free for Amazon Prime members! Through the end of September, all Amazon Prime members in eligible zip codes in the New York metro area can use AmazonFresh for free. Sign in with your Amazon account to get started. If you are not an Amazon Prime member, you can start your Amazon Prime 30-day free trial today. After September, you will need a Prime Fresh membership (an upgraded tier of Amazon Prime) to continue enjoying free delivery from AmazonFresh. You will not be automatically charged for Prime Fresh.
brudgers 11y ago
I am finding myself using Amazon less and less. For years it's been my goto for long tail items and books, but over the last few years it's algorithms have segmented me into the "show high margin prices" bin to the point where I pretty much see prices that are competitive with my local big box and Amazon jacks up the shipping on anything in the first few pages. I guess I shouldn't have used that $30 credit for getting one of their credit cards a few years ago...or paid it off each month, because now Amazon's first order of business appears to be clawing all my previous savings back. Not that I take it personally. Amazon went down the path to breaking trust when they came up with Prime. What does it say other than give us money so we won't charge you more. Time, gravity and a slippery slope mean that logic ultimately becomes dominant without heroic efforts of corporate culture. Sponsored ads don't create a culture to help anyone within who might be trying to fight the slide. Hell, Amazon is even in the textbook rental business screwing college students. The problem for Amazon is that they don't have good locations locked down. Six letter .com domains aren't prime real-estate. All they have is the quality of the sales experience, and the more convoluted shopping for value becomes the better competition looks.
- jusben1369 11y ago
  You do realize you're making this comment at a time where every major Amazon metric is pointing up? I'm not disputing how you feel about Amazon but it seems pretty clear that you're the exception and not the rule. Amazon is currently firing on all cylinders and rather than making bad decisions over the years seems to be enjoying the benefit of making good decisions over the years.
  - brudgers 11y ago
    Sure. There was a time when all indications were that McCaffee AntiVirus was a good idea too. It persisted after Microsoft released Security Essentials and Windows Defender and just last week I talked with someone who was thinking about switching to Mcaffee from Trend AntiVirus because their Windows box was having issues. My point is that once Amazon stopped focusing on growth via value for all customers, they may have mortgaged their future. A string of mediocre experiences outweighs a long run of positive ones over many many years. And Ebay, now my first choice long tail shopping stop, has gone the other direction. They've made the experience better and more straight forward and I don't find a $7.42 charge for shipping that should be $2.99 at most at the end of checkout because the shipping is listed right with the item. Or to put it another way, Ebay's business model isn't built around the idea of seeing if it can get away with something. The problem is when trying to get away with something gets baked into the algorithm, it's hard to take out of the company culture. Unlike Amazon, sometimes I drive past Walmart. I don't accidentally type "amazon" into my browser bar. So Walmart is more likely to get a second chance just due to physical precense. Amazon, has nothing but its name and it is organizing its business model toward download.com. Sucking is not a good long term business model.
simonebrunozzi 11y ago
Well, it is no longer true as of now. AMZN stock went down a bit after a day of trading.
jimbokun 11y ago
This article I found linked in the side bar reflects my thoughts on Amazon's valuation pretty well: http://blogs.wsj.com/moneybeat/2015/07/24/amazon-and-apple-take-part-in-a-keynesian-beauty-contest/ http://blogs.wsj.com/moneybeat/2015/07/24/amazon-and-apple-t...
bunkydoo 11y ago
Amazon should try their hand at brick and mortar. I would love to see less Wal-Marts
dfar1 11y ago
I wonder if amazon would look like a walmart if it had a physical store.
pmm621 11y ago
1997 "Lee Scott, the future Walmart CEO who was then running logistics told Dalzell (who Amazon was hiring) that Amazon was a novel idea but that it had limited potential. Don Soderquist, Walmart's COO, said that because Amazon didn't store its own iventory--at the time, it just ordered it from distributors and then quickly shipped it back out-- the model would hit a wall once it got to $100M in sales. (from "The Everything Store" Bezzos' biography)
neel8986 11y ago
On a side note currently three biggest companies by market cap are Apple, Google and Microsoft leaving behind the likes of exxon and berkshire. This is truly a rare event when all top three are tech. Either a glimpse of a bubble in making or tech truly is the new oil.
_raisin 11y ago
All thanks to the fire phone...
TrevorJ 11y ago
I think AMZ's endgame is to own the whole pipeline end to end. Using third party sellers has been a good way to get the scale underneath them but 10, 15 years down the road I fully expect the most profitable and in demand items will be sold direct by amazon itself.

294 points by ryanmonroe 11y ago

Is Amazon's wealth more concentrated ( as in just in bezos ) than Wal-Mart (the walton family)? I think it's unfortunate if it is.

NhanH 11y ago
That's an odd sentiment. Walmart is more distributed just because Sam Walton was dead. As the time he was alive, it's even more concentrated than Amazon has every been.
Retric 11y ago
No really, any two of the walton family's main inherators are worth more than bezos.
joelrunyon 11y ago
Why do you say that?
brentm 11y ago
The Walton's own a lot more of Walmart, closer to 50%. Bezos less than 20%.
- krstck 11y ago
  Also, Bezos has far more influence (and responsibility) over Amazon than the Waltons do over modern-day Walmart.
boomzilla 11y ago
The Walton family hold a bit more than 50% of Walmart shares. This is by design. As they control the board, they usually make sure that Walmart buys back enough share to keep them in control. Their income are mostly coming from dividend, which amounts to a few billion a year :) It is possible to argue that this basically prevents Walmart from taking risks in more innovative business lines. Jeff Bezos holds less than 20% of Amazon now, but he basically "owns" Amazon for all practical purposes. I'd also say that at least 20% of Amazon valuation is based on Bezos being the CEO/President/Chairman of the Board.
pmelendez 11y ago
Most of Amazon revenue is reinvested in the company, so the models are a bit different.
throwaway6497 11y ago
Why does it matter? This is probably true for most VC backed companies. Founders have loins share of equity. Why is it unfortunate? This is how VC backed economics work or more generally how capitalism works. Risk takers reap most rewards.

blackaspen 11y ago

This has been writing on the wall for a while. While both companies have their pitfalls, it's certainly interesting to continue to watch e-commerce's rise.

krstck 11y ago

One interesting thing is that Amazon is almost approaching Walmart's bad reputation in terribleness for employees. (Maybe not software devs, but perhaps warehouse contractors.) Is this kind of ruthlessness essential for such a huge company to be so profitable?

chambo622 11y ago
I remember reading about Amazon making warehouse employees sign a non-compete agreement - a stipulation that was rather quickly reversed after The Verge and other publications exposed it. What other examples of terribleness have you read about?
- krstck 11y ago
  There are articles on how horrible the warehouse conditions are. (For example, http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...). Note that I'm not trying to condone that perception, just merely observing that it exists in tandem with Walmart's (whose problems are well-known).
  - Vexs 11y ago
    This came up on reddit a while ago; the general tone of the conversation I got was that it really depends on which warehouse you're working at, some had horrible managers and others had really good working experiences. It's still strange that its like that though.
xd1936 11y ago
The crazy thing is, they're not even profitable right now.
- serge2k 11y ago
  They reported a quarterly profit just yesterday.
11y ago

ck2 11y ago

Is it worth more than walmart + walmart.com? I doubt it.

blackaspen 11y ago
Walmart.com revenue/worth is a tiny, tiny fraction of the whole Walmart.
cheald 11y ago
Is walmart.com owned by a different company?
SwellJoe 11y ago
Walmart.com is wholly owned by Walmart (it is merely a division of Walmart, actually, and not a separate entity of any sort), and we're talking about market cap, so...according to this article, Amazon is worth more than Walmart and Walmart.com.
fahim305 11y ago
yes the measure they are talking about is market cap, not sales. the market cap for Wlmt includes sam's club, walmart.com, etc. In terms of total sales, Wlmt (including subsidiaries) is close to $500B, while Amazon is approaching $100B. However, Wlmt.com (domestic) is only ~2% of total sales times $288B total domestic sales so only ~$5B sales

theseatoms 11y ago

Not if you include debt, in addition to equity. http://blogs.ft.com/lex-live/2015/07/24/no-amazon-is-not-more-valuable-than-wal-mart/ http://blogs.ft.com/lex-live/2015/07/24/no-amazon-is-not-mor... WARNING: paywall

MaysonL 11y ago
I don't know why this is getting down-voted. Amazon's enterprise value is about $220 billion, Walmart's about $275 billion. I.e. Walmart is worth about $50 billion more than Amazon.

fahim305 11y ago

This was a long time coming. 20% growth on a business that is approaching $100B revenue (and probably 2-3x that in terms of GMV, a better measure of its size and dominance), and AWS continues to grow as does the digital side of the business. The crazy thing is that they still have low market share in several of the retail categories that its in (apparel, grocery, several product lines even in home, health & beauty, electronics, etc.) Their achilles heal though continues to be browsability and searching. It is obviously a great place to go if you know exactly what you want, but continues to be a poor experience if you are browsing for an item or don't know what you want. There continues to be duplicate listings for the same items (some listed by 1st party and some by 3rd party), and it is very tough to browse items. Once they actually figure this out and implement, that's when this will really become game over (at least domestically)

vonmoltke 11y ago
> Their achilles heal though continues to be browsability and searching. It is obviously a great place to go if you know exactly what you want, but continues to be a poor experience if you are browsing for an item or don't know what you want. There continues to be duplicate listings for the same items (some listed by 1st party and some by 3rd party), and it is very tough to browse items. Once they actually figure this out and implement, that's when this will really become game over (at least domestically) Their catalog is getting so bad that I can't even find things when I know exactly what I want.
anthony_romeo 11y ago
One thing I note is that their recommendations aren't terribly smart. I mean, I bought a coffee table through Amazon a few months ago. After buying the table, for several weeks it kept showing me coffee table recommendations. I would think Amazon would be smart enough to try and sell other living room furniture or things to put atop the coffee table I just bought, rather than trying to sell me more coffee tables.
- _delirium 11y ago
  Their recommendations feel to me like the recommendation engine is still more or less the one they had when they were mainly an online bookstore. So they assume you want things similar to the item you bought: other novels in the same genre, nonfiction books on similar subjects etc. Works fine for books, less well for coffee tables.

fixxer 11y ago

Call me old fashioned, but I "value" profitable companies more than unprofitable ones. Amazon had a net loss of $241m last year[1], while Walmart had a net profit of $16b[2]. [1] http://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual http://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual [2] http://finance.yahoo.com/q/is?s=wmt+Income+Statement&annual http://finance.yahoo.com/q/is?s=wmt+Income+Statement&annual

SwellJoe 11y ago
The stock market tends to value growth very highly (probably too highly). Amazon is growing faster than Walmart. Not that I disagree with you on how to "value" a company, but the stock market thinks the expected future growth of Amazon is more valuable than the current profit of Walmart.
fahim305 11y ago
profit is irrelevant. their capex is $1B-$2B per quarter. they could lower their capex at any point and show a few hundred million dollars net earnings. the point is that they are as big as they are and continue to invest in the future, and hence the insane p/e ratio and stock price
- fixxer 11y ago
  Let me know when they can shuffle the books and make 16 billion fall out and I'll stop laughing.
  - pnut 11y ago
    On first read I thought you meant a giant warehouse robot shuffling books like a deck of cards. Let me know when they can do that too.
crindy 11y ago
It seems like Amazon is in a position where they could turn a huge profit, they're just choosing to reinvest instead. If they just raised prices by something tiny like 1%, wouldn't their profits become instantly massive?

ryandvm 11y ago

Wal-Mart's Q4/2014 net income was 16,363,000 and they have a P/E of 14.6. Amazon's Q4/2014 net income was -241,000 and they had a P/E of, well, they didn't. I think Amazon has been one of the most innovative companies of the last decade, but Amazon is going to be a much less attractive consumer option as they start transitioning to business models that require them to actually profit. I could steal all the lawn mowing business in town if I were willing to mow lawns for free...

3pt14159 11y ago
Then short sell Amazon and long Wal-Mart. Every time these conversations come up it's always the same thing. One said says profit the other side says to skate where the puck is going.
mason55 11y ago
Do you realize that their lack of profit is not because they can't profitably sell things at current price points? The lack of profit is due to reinvestment in the business. It would be more like if you were mowing lawns at a very small profit and using that profit to continually buy more lawnmowers and trucks and eventually investing in developing my own, more efficient lawn mowing technology. Each summer you lose a little money but after 50 years you now are mowing 50% of the lawns in the US and doing it more efficiently than anyone else is capable of.
- Sherlock 11y ago
  Accounting doesn't work that way. You can have huge profits and reinvest them, but your income statement will show the profits in any case. Yes, Amazon could be more profitable with different price points, but sales would take a hit, and thus their growth prospects. FWIW, I think Amazon valuation is fair.
  - gitah 11y ago
    Software R&D (especially for new initiatives) is typically not capitalized so if a lot of investment is in software than it would show up as operating expenses rather than capex.

kin 11y ago

As someone who shops at both Amazon.com and Wal-mart, this makes me happy. Now, I don't know if their worth translates to more success but all I know is that my experience with amazon is always pleasant and convenient whereas my experience at Wal-Mart is almost always unpleasant and inconvenient.

_delirium 11y ago
I have mixed opinions. I find dealing with UPS/Fedex delivery attempts almost as infuriating as dealing with traffic and the Wal-mart store. On other angles: Wal-mart's browsability and prices are better, but Amazon's selection and ability to find specific items are better. In some specific areas the contest is much clearer: Amazon is much better for books, Wal-mart is much better for household supplies, etc.
- ergothus 11y ago
  I'm in a strange circumstance where the USPS won't normally deliver packages to my house (I'm on a major road). UPS and FedEx both will. The exception is on Sundays, when the USPS normally doesn't deliver to anyone, except Amazon pays them to. On Sunday, they'll deliver packages to my door. So to have true convenience, I actually TRY to get my Prime packages delivered on Sundays. That's just weird.

kumarm 11y ago

I am surprised this is not talked about more: Amazon Full Time Employees: 154,100 Walmart Full Time Employees: 2,200,000 (Based on Yahoo Finance Company Profile Stats) There is a growing need for Human's to work Lesser Hours going forward rather than more Hours.

jackreichert 11y ago
Implicit in that is the growing need for humans to support themselves comfortably on fewer hours going forward as well.
minot 11y ago
I could argue that fewer people need to work and lean towards a basic income. Sadly, this is not very palatable to most people.
- seanflyon 11y ago
  I think it would become much more palatable if someone came up with a plan for basic income that didn't require tripling the federal budget.
  - sitkack 11y ago
    Taxing the rich comes to mind.
    - jessaustin 11y ago
      Increasing taxes to fund increased services is exactly increasing the federal budget.
    - afarrell 11y ago
      Parent said "budget", not "deficit".
_delirium 11y ago
That difference is partly due to different things being valued: Walmart's valuation is primarily its current business, while Amazon's valuation is primarily its future growth prospects. That future growth is valued in the market cap today, but its actual materialization will only take place in the future, so doesn't show up on the payroll today. If Amazon does actually succeed in growing to Wal-Mart levels of sales, it will end up with a lot more employees than it currently has, though quite possibly still fewer than Wal-Mart.

mullen 11y ago

I just don't understand why Amazon.com stock is so high. Bezos has stated time and time again that he intends for Amazon.com to never make a profit and to never pay a dividend, always folding all of the earnings back into the company for future growth. There is no logic to its value.

aetherson 11y ago
Clearly people think that Amazon will take over the world -- literally -- and their only method of influencing their new overlord will be to have shares to vote. That's a joke. Presumably the ultimate belief in the value is either that Bezos will eventually share some value of the company, or that Bezos will retire or die and it won't be his decision, or that stockholders will force a value-sharing over Bezos' objections (he does not, after all, have a majority).
Zigurd 11y ago
Never take "never" literally. Never.
umanwizard 11y ago
The company can't grow forever in a finite universe. "If something cannot go on forever, it will stop", despite what Bezos says now. Someday Amazon will either be out of business or paying a dividend.
- deleted 11y ago
  [deleted]
- exacube 11y ago
  Isn't this true for all companies? And if so, why is this meaningful in particular for Amazon
  - DavidHm 11y ago
    Not necessarily. Amazon aspires to have 100% of market share where it competes, or very close to. Other companies don't aspire to even 50% of market share. See Apple for example. They are happy to have the premium segment locked in and reap the profits out of it.

MaysonL 11y ago

Of course, the headline is wrong. Walmart is worth about $50 billion more than Amazon. Compare their enterprise value, not their market cap.

dlubarov 11y ago
So Walmart's operating assets are worth more than Amazon's. I still think the headline is fair. Usually when we speak of a company's value, we mean the entire company including non-operating assets and liabilities.

Animats 11y ago

WalMart revenue: $482bn. Amazon revenue: $89bn. Amazon is only worth its current market cap if it can increase sales by at least 5x. Which it probably can, but it will take some years. Wal-Mart is expanding into grocery stores, with their "Neighborhood Markets". (They mean big supermarkets, not convenience stores. Typical size is 45,000 square feet.) Wal-Mart has 40 square miles of floor space worldwide.

zanny 11y ago
And Amazon has pretty much 0, and is valued more. Thats more the market saying that the overhead of having stores, of having staff maintaining them, of maintaining a supply chain to stock them, and all the bureaucracy around that is not worth it. That just having a website and good distribution centers is enough, and Walmart thus has a lot of unnecessary overhead, especially when they have both the stores and their website. There are still a lot of things Amazon does a poor job supplying, and having to pay $200 a year to get quick shipping is a severe stain on their practical use as a walmart surrogate for many people.
- deleted 11y ago
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- mbil 11y ago
  > ...having to pay $200 a year to get quick shipping... Amazon Prime (two-day shipping) is $99/year[0]. Are you referring to something else? [0] http://www.amazon.com/gp/product/B00DBYBNEE/ref=gno_joinprmlogo http://www.amazon.com/gp/product/B00DBYBNEE/ref=gno_joinprml...
  - vukers 11y ago
    He might be referring to the next tier up, "Prime Fresh", though I haven't come across exact pricing yet: https://fresh.amazon.com/about https://fresh.amazon.com/about Free for Amazon Prime members! Through the end of September, all Amazon Prime members in eligible zip codes in the New York metro area can use AmazonFresh for free. Sign in with your Amazon account to get started. If you are not an Amazon Prime member, you can start your Amazon Prime 30-day free trial today. After September, you will need a Prime Fresh membership (an upgraded tier of Amazon Prime) to continue enjoying free delivery from AmazonFresh. You will not be automatically charged for Prime Fresh.

brudgers 11y ago

I am finding myself using Amazon less and less. For years it's been my goto for long tail items and books, but over the last few years it's algorithms have segmented me into the "show high margin prices" bin to the point where I pretty much see prices that are competitive with my local big box and Amazon jacks up the shipping on anything in the first few pages. I guess I shouldn't have used that $30 credit for getting one of their credit cards a few years ago...or paid it off each month, because now Amazon's first order of business appears to be clawing all my previous savings back. Not that I take it personally. Amazon went down the path to breaking trust when they came up with Prime. What does it say other than give us money so we won't charge you more. Time, gravity and a slippery slope mean that logic ultimately becomes dominant without heroic efforts of corporate culture. Sponsored ads don't create a culture to help anyone within who might be trying to fight the slide. Hell, Amazon is even in the textbook rental business screwing college students. The problem for Amazon is that they don't have good locations locked down. Six letter .com domains aren't prime real-estate. All they have is the quality of the sales experience, and the more convoluted shopping for value becomes the better competition looks.

jusben1369 11y ago
You do realize you're making this comment at a time where every major Amazon metric is pointing up? I'm not disputing how you feel about Amazon but it seems pretty clear that you're the exception and not the rule. Amazon is currently firing on all cylinders and rather than making bad decisions over the years seems to be enjoying the benefit of making good decisions over the years.
- brudgers 11y ago
  Sure. There was a time when all indications were that McCaffee AntiVirus was a good idea too. It persisted after Microsoft released Security Essentials and Windows Defender and just last week I talked with someone who was thinking about switching to Mcaffee from Trend AntiVirus because their Windows box was having issues. My point is that once Amazon stopped focusing on growth via value for all customers, they may have mortgaged their future. A string of mediocre experiences outweighs a long run of positive ones over many many years. And Ebay, now my first choice long tail shopping stop, has gone the other direction. They've made the experience better and more straight forward and I don't find a $7.42 charge for shipping that should be $2.99 at most at the end of checkout because the shipping is listed right with the item. Or to put it another way, Ebay's business model isn't built around the idea of seeing if it can get away with something. The problem is when trying to get away with something gets baked into the algorithm, it's hard to take out of the company culture. Unlike Amazon, sometimes I drive past Walmart. I don't accidentally type "amazon" into my browser bar. So Walmart is more likely to get a second chance just due to physical precense. Amazon, has nothing but its name and it is organizing its business model toward download.com. Sucking is not a good long term business model.

simonebrunozzi 11y ago

Well, it is no longer true as of now. AMZN stock went down a bit after a day of trading.

jimbokun 11y ago

This article I found linked in the side bar reflects my thoughts on Amazon's valuation pretty well: http://blogs.wsj.com/moneybeat/2015/07/24/amazon-and-apple-take-part-in-a-keynesian-beauty-contest/ http://blogs.wsj.com/moneybeat/2015/07/24/amazon-and-apple-t...

bunkydoo 11y ago

Amazon should try their hand at brick and mortar. I would love to see less Wal-Marts

dfar1 11y ago

I wonder if amazon would look like a walmart if it had a physical store.

pmm621 11y ago

1997 "Lee Scott, the future Walmart CEO who was then running logistics told Dalzell (who Amazon was hiring) that Amazon was a novel idea but that it had limited potential. Don Soderquist, Walmart's COO, said that because Amazon didn't store its own iventory--at the time, it just ordered it from distributors and then quickly shipped it back out-- the model would hit a wall once it got to $100M in sales. (from "The Everything Store" Bezzos' biography)

neel8986 11y ago

On a side note currently three biggest companies by market cap are Apple, Google and Microsoft leaving behind the likes of exxon and berkshire. This is truly a rare event when all top three are tech. Either a glimpse of a bubble in making or tech truly is the new oil.

_raisin 11y ago

All thanks to the fire phone...

TrevorJ 11y ago

I think AMZ's endgame is to own the whole pipeline end to end. Using third party sellers has been a good way to get the scale underneath them but 10, 15 years down the road I fully expect the most profitable and in demand items will be sold direct by amazon itself.