I too love AMZN and think they have a great business that I love. However I believe their valuation is astronomical. According to Google Finance, at 79.41, their stock is trading 51x forward earnings at 67x trailing. This for a business, that is certainly growing, but has a 4.4% operating margin and a 3.2% net margin? Sure they have tripled revenues in the last 5 years but their operating margins are about the same as they were 5 years too (sub 5%). Don't get me wrong, I'm a junkie for their product and spend more money their than anywhere else. My quick take though is that they don't get to bring home much of that money I spend.
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Latest | Highest ratedThe Case for Amazon.com [View article]
I too love AMZN and think they have a great business that I love. However I believe their valuation is astronomical. According to Google Finance, at 79.41, their stock is trading 51x forward earnings at 67x trailing. This for a business, that is certainly growing, but has a 4.4% operating margin and a 3.2% net margin? Sure they have tripled revenues in the last 5 years but their operating margins are about the same as they were 5 years too (sub 5%). Don't get me wrong, I'm a junkie for their product and spend more money their than anywhere else. My quick take though is that they don't get to bring home much of that money I spend.