The higher the P/E, the more investors believe the earnings will increase in the future. So yes, a P/E of 130 for a company as mature and large as AMZN is outstanding This is a great stock for the long term. The time to buy AMZN was when it was in the 170s, I bought some more then. It could go back there, but eventually it will march to $250.
The only way a high PE works is if you have comfortable margins which Amazon does not. Plus they are selling the Fire at a loss.
Since you are new to this. Let me tell you there are no investors here. These guys predicted 300 at 240...240 at 200 and now 200 at 180..and guess what..they are still above water..go figure ;)
NO!!! unless you have fairly high margins which Amazon does not read this article
At $200 cheaper than the iPad, even if Amazon’s profits are marginal because of the sunken price, they’re selling what essentially amounts to a license to buy more stuff from Amazon.com, in the same way buying an iPad or an iPhone—the reasons you don’t even need a computer anymore to operate at full functionality—is a license to buy from the iTunes Store. They’re betting on the lesser profits on the Fire to equal an uptick in purchasing from Amazon. Makes enough sense, no?
Let’s not forget, Amazon sells way more than simply media, “traditional” (i.e. analog?) or otherwise. They’re becoming a publishing imprint that makes the transaction between author and reader a significantly more direct one, in a format people are used to working with. For example, are consumers more likely to trust book reviews on iTunes or on Amazon, based on appearances alone? Furthermore, who goes to Wal-Mart and walks out with only that which they came to shop for? Apple’s limited in its ability to upsell merchandise once the customer is in the store to, well, computer stuff and media.
Hitachi- You and AMZN have the same problem. You argue about the kindle all the time a forget the rest of your business, which is how the money should be made--retailing. The loss of focus you have is shared by AMZN and will be their downfall. Their concerned about new kindle and nicer offices. Investors are concerned about growth and margins.