shareholders_inequity

Amazon's Report: Full of Holes

Look I am by no means a bull on AMZN, I agree it's way overpriced, but please get your facts straight. Shipping costs ARE INCLUDED in COGS.

From the 10K:

" Outbound shipping-related costs are included in "Cost of Sales"..."



Yes, they are subsidizing sales quite a bit through shipping:

Net shipping cost % of Total Sales rising...
Q4 2006: 3.1%
Q4 2007: 3.2%
Q4 2008: 3.6%

...and they spending more on shipping per $ of shipping revenue received...
Q4 2006: 1.65 shipping cost/shipping revenue
Q4 2007: 1.69
Q4 2008: 1.91

Note the spike in Q4 2008

Why I'm Selling Apple and Google Today - and Holding Amazon

If Apple and Google have high expectations and valuations, what does that say about AMZN which is trading nearly 40x 2009 EPS?


On Jan 07 05:16 PM Freund Investing wrote:

> "The story on Apple is Jobs and his health."
>
> I disagree. The story on Apple is valuation and expectectations.
> Both are too high. Same with Google.

Amazon Shares Could Appreciate by 20%

Good analysis, but I have to respectfully disagree.
How is a 12x EBITDA "reasonable"? Other large cap high growth companies trade much lower than that: GOOG trades at 8x 2009 EBITDA, APPLE 8x, ISRG 10x. Why Does AMZN deserve to trade higher?

Additionally, AMZN's negative Working Capital overstates its true cash balance--making its EV understated, thus making it look "cheaper".

The company's 2009 P/E multiple is more like 35x not 30x, but even 30x is extremely high. Further, it's a fools game assuming that a company with 20B in revenues does not face multiple compression. As the company gets larger it will be hard pressed to maintain that 30x multiple in the out years (see GOOG, CSCO, MSFT, APPLE, RIMM,etc.). How's AMZN any different?

Who doesn't already know about all the positives you outlined? The current valuation fully reflects all those positives and then some.