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Timothy Phillips

 
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  • Amazon: When The Music Stops [View article]
    PSalerno - I agree that AMZN is valued on P/S, but my point is that it won;t much longer as the investments have proven a loser (analysts move to P/S when earnings are sacrificed for growth over the short haul, not long haul - because in the long haul someone will start to grow faster and grab those investors away)

    AMZN ROIC on all of the "investments" have moved from 21% 6Q's ago to 1.5% now. They have been investing for more than 3 years, and the ROI keeps shrinking. It should have had a positive impact by now ... but yet, they can;t make any cash flow on what they spent (and this return includes cash from pushing out payables - return on actual invested capital would be negative w/o it).
    Sep 30 12:47 PM | 2 Likes Like |Link to Comment
  • Amazon: When The Music Stops [View article]
    Bill - why does AMZN deserve a different P/S valuation than WMT(4x) or BBY (5x)? You didn't do a good job convincing of P/S being the correct metric: "This metric just seems better" ?.. P/S is fine if you believe a company earnings/CF are temporary being held down due to expansion, acquisition, etc.. but there is no proof (in fact you point to the opposite - penny pinching) that earnings will ever be there.

    The problem with a straight P/S on an unprofitable company is that you can have a huge valuation right up until the day the company goes BK. AMZN could drop prices 20% today in order to juice revenue further. In your model, you would raise your price target, while the company would run out of money in less than 2 Q's. If you are going to use P/S you should at least value less than WMT or BBY as they are profitable ...
    Sep 30 08:02 AM | 6 Likes Like |Link to Comment
  • 2 Reasons Why Amazon.com Will Again Miss Revenue Estimates [View article]
    And let's keep in mind that Apple sells more than 5x more tablets than AMZN in spite of making fat profits on the device vs. no profits for AMZN. Amazon basically gives them away, and barely has market share.

    So, if their plan was to take no profits over the past 2.5 years to be the market leader by now - that strategy / execution is not working well. Most would call that a huge failure.
    Sep 25 09:59 AM | Likes Like |Link to Comment
  • 2 Reasons Why Amazon.com Will Again Miss Revenue Estimates [View article]
    Hi Paulo - my model is currently pumping out the following based on comscore, channeladvisor, retail sales, gas prices, etc...

    (this does not account for any revenue recognition change from 3P to 1P):
    - Product sales (direct e-commerce): 15.0% Y/Y(lowest ever by 300bps)
    - 3P retail: 27.6% Y/Y
    - AWS/dig: 58.0% Y/Y

    Total = $16.36B (18.5% Y/Y) vs. consensus of 21.4% Y/Y
    EPS = ($0.13) vs. consensus of ($0.09).

    So, my model which is usually pretty accurate has them missing revs by a bunch (290bps or $400M), and missing EPS by 4c.

    Ironically, the big lowering of 1P sales due to comscore US data actually raised EPS as overall margins are higher (they lose money on 1P as I have shown in my articles).

    My fear is they headline well with the revenue recognition change, and beat on revs due to this even margins will get crushed. This could be the fuel to top off the parabolic launch to $350+
    Sep 22 07:42 PM | 2 Likes Like |Link to Comment
  • Amazon.com: The Mix Matters And Explains Most Of The Profit Implosion [View article]
    Paulo - don;t forget that shipping was at its bottom as a % of revenue in 2009 and 2010 due to gasoline being a cyclical low (it has increased 40% since then). Shipping has grown from 7.1% in 2009 Q3 to 8.7% last Q. That has removed 1.6% of the net as well, in spite of new "close to customer" FC's that should be reducing the shipping expense.
    Aug 23 02:57 PM | 7 Likes Like |Link to Comment
  • eBay A Leading Indicator Of Amazon Revenue - Revisited [View article]
    An R2 is 0.71, while interesting as a directional correlative point, is largely worthless as a predictor. You need at least 0.90 or more for the independent variable to act as an accurate predictor (assuming the other technical indicators are significant).

    Broader market indicators provide much higher R2's when combined in a more complex regression (Paulo and I have discussed these points) - Channel advisor, Consumer spending, retail spending, e-com data, etc... all are available prior to AMZN reporting. I have been able to nail AMZN revenue growth pretty closely based on this.

    eBay numbers are better used to compare the accuracy of Channel Advisor numbers, so when you apply them to AMZN you account for error in the eBay estimates back to AMZN in the model.

    Of course, knowing the AMZN revenue number perfectly vs. analyst estimates would not have made you money in the stock anyways, as they have consistently missed on revenue and their stock has increased each time.
    Jul 31 05:16 PM | Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    I'm done with this one .. My logic has never been so far off from reality on anything .... if I can't explain it, I'm not going to discuss it anymore. I was right this week on AAPL, FB, NFLX, and on AMZN numbers - but wrong on AMZN stock movement. I am so disconnected from the analysts logic. Either I am wrong and should up, or I am right and these guys are all colluding in a huge lie, and there is no point in fighting the tape anymore. Either way, I am done commenting. Maybe one less bear will help turn sentiment. Good Luck all.
    Jul 26 01:09 PM | 3 Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    yeah - I didn't inlcuded that becuase it makes no sense at all. What the Hell is he trying to say?
    Jul 26 10:01 AM | Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    That could be. It is not clear to me in the call that they made any changes in Q2 in regards to ebook accounting (wholesale vs. agency) .. here is the exchange .. "working on it" could be taken as not implemented yet, or that they are part way through - not clear (as with every other answer).

    Ken Sena - Evercore Partners
    Hi, thank you. Just going back to your comments on unit acceleration; has the shift from agency to wholesale in terms of the DOJ E-Book Settlement, has that completed or you’re still working your way through many of the U.S. publishers? Thank you.

    Thomas J. Szkutak - SVP, CFO
    We’re working through it. I wouldn’t say that that’s complete, but we’re working through it.
    Jul 26 09:22 AM | Likes Like |Link to Comment
  • ChannelAdvisor Data For Amazon In June Is Out, Conclusion Remains The Same [View article]
    Paulo - did you notice that 3P unit volume matched channel advisor perfectly in Q2 (29.0% to 29.0%)? In the past AMZN 3P unit growth was always a little higher than CA.

    Another interesting note, is that Q2 was the 1st time since AMZN gave us 3P unit numbers that 1P was the same or larger than 3P in terms of unit growth.

    3P ASP's are increasing significantly (7.2% in Q2, 4.6% in Q1)reflecting the higher charges and commissions. Looks like it is having an impact on volume.
    Jul 26 05:59 AM | Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    I made some adjustments this morning. While spending is outpacing the trend my model developed (it is accelerating even more significantly now in shipping, T&C and fulfillment), 1P product margins (less shipping) are increasing pretty good. Probably the best upside I can say about AMZN right now. Once I adjusted the product margins, to reflect the new trend, I get a 65c full year 2013 EPS.
    Jul 26 05:19 AM | Likes Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    KrK - A/R has everything tied into it (1P/3P/AWS, etc..). I like to follow unearned revenue (less than 12 month pre-paids: Prime, gift cards, AWS) and LT liabilities (more than 12-month pre-paid: AWS & Gift cards). The growth in these numbers has slowed, and may be a better indicator that AWS is going to slow over the next 12 months.

    I do agree with Paulo that the fact the three of us who know the financials of this stock so well have to guess at the specifics is troubling and should not be rewarded.
    Jul 26 04:54 AM | 1 Like Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    The Bank of AMZN continues - AMZN generated an additional $642M in cash by pushing out their metrics again, and inventory mgt got a little worse (numbers are Q/Q).

    - dropped $434M in net cash
    - inventory days (TTM) increased 0.7 days to 45.6 days
    - Days Payable increased 1.0 day to 72.8 days!
    - accrued expenses increased 1.3 days to 28.7 days
    - long-term liabilities increased 0.1 day to 14.5 days

    When will the chickens come home to roost?
    Jul 25 05:53 PM | Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    Paulo - it doesn't seem like there was any accounting change as the GM% works out on the rev growth by PL.
    Jul 25 05:48 PM | Likes Like |Link to Comment
  • Accounting Change Stands To Inflate Amazon's Reported Revenues [View article]
    Hi Ted - my updated model calls for 1c in EPS for 2013 !!!
    Jul 25 05:47 PM | Likes Like |Link to Comment
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