Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Amazon.com Announces Second Quarter Sales Up 20%

ir.aboutamazon.com

Post reply on HN
Print view View original

41–50 of 147 posts

Re: Amazon.com Announces Second Quarter Sales Up 20%

#41

Post by brlewis »

mythz wrote: post #30
brlewis wrote: post #27

Earlier quoted context omitted.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

They're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.

You've presented a concise and valid set of statements that argue that a 100 P/E ratio might be expensive, but don't justify calling it insanely expensive.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#42

Post by djakjxnanjak »

mythz wrote: post #30
brlewis wrote: post #27

Earlier quoted context omitted.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

They're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.

Revenue is up 20% year over year. The growth is real, not just a goal.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#43

Post by scarface74 »

mgfist wrote: post #29
scarface74 wrote: post #18

Earlier quoted context omitted.

Revenue is nothing but bragging rights. Profit is what matters.

That's not true. Road to profitability and market cap are what matter. Hypothetical: One business is making $100million in revenue, is losing $20million a year but has enough market cap to grow 10-100x and is spending most of its money on R&D/marketing, while a second business makes $1million in profit on $10million in revenue, but you've maxed out your growth and there's no more market cap, I'd rather be business 1,…

Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard.

Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story.

And look no further than YC backed companies. Have any of them become profitable? Even the one company that has gone public - Dropbox - isn’t looking to good these days.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#44

Post by kgwgk »

mruts wrote: post #39
gringoDan wrote: post #4

$14B in goodwill! Crazy.

That doesn't sound super unreasonable to me. Imagine if Amazon suddenly was a different company with a different name, holding everything else the same. How would this affect cashflows and sales? The difference in sales between this hypothetical company and Amazon is essentially what goodwill is. $14B sounds okay when you think about it like this.

No, that’s not what $14bn of goodwill in Amazon’s balance sheet are.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#45

Post by pmart123 »

brlewis wrote: post #27
mythz wrote: post #11

Earlier quoted context omitted.

As always, it's due to the results being below Wall St estimates that are already priced into the stock which is still trading at an insanely expensive 100 P/E ratio.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

P/S is also hard to use unless you did that for just AWS. Better to look at price to operating cash flow and better yet to capitalize R&D and leases.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#46

Post by mythz »

djakjxnanjak wrote: post #42
mythz wrote: post #30

Earlier quoted context omitted.

They're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.

Revenue is up 20% year over year. The growth is real, not just a goal.

Only 20% is why the stock is down after hours, at 100 P/E AMZN is speculatively priced where they're expected to achieve infinite growth until they deliver financials that justify their valuation which Investors are betting on to happen before they hit any growth ceiling. There's also no room for an economy downturn which expensive stocks like AMZN are extremely volatile to.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#47

Post by xkjkls »

brlewis wrote: post #27
mythz wrote: post #11

Earlier quoted context omitted.

As always, it's due to the results being below Wall St estimates that are already priced into the stock which is still trading at an insanely expensive 100 P/E ratio.

Price/Sales is 4.01, lower than GOOG, FB or MSFT. They are going for growth, not profit. No valuation metric is perfect, but P/E is particularly useless for this company.

A huge part of Amazon's business is retail where it never is going to have the same margins as any of the tech companies you listed. It's not really useful to compare Price/Sales in those contexts.

Re: Amazon.com Announces Second Quarter Sales Up 20%

#48

Post by crumpets »

scarface74 wrote: post #43
mgfist wrote: post #29

Earlier quoted context omitted.

That's not true. Road to profitability and market cap are what matter. Hypothetical: One business is making $100million in revenue, is losing $20million a year but has enough market cap to grow 10-100x and is spending most of its money on R&D/marketing, while a second business makes $1million in profit on $10million in revenue, but you've maxed out your growth and there's no more market cap, I'd rather be business 1,…

Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the…

OP meant total addressable market (TAM).
Post reply on HN