I guess some thought they would take away $20 billion. So it is twice as good news. Amazon should double for the news.
The article that gets me is the one that says 14% of Amazon's revenue may come from AWS and it is just starting. Amazon has been doing it for many years, so that is wrong. CRM has been doing cloud source its whole life has the biggest percentage of the whole market and has a margin of 1% or less. How is it great that a zero margin business is going to be even bigger in Amazon's future. I liked the idea that AWS allowed for double duty on Amazon's server farms. But for Amazon to spend money on additional infastructure for a losing business seems pointless. They are a retail company that sells goods better than everybody else.
Prime costs Amazon more in shipping, and a good chunk of new users cancel within the month. So now they have a situation where people are costing amazon more to ship for free. But I am sure more and more people are joining, but also people are taking advantage so assuming 1/5 of people do it as an alternative to 2-day shipping for free.
then that means of there 1 million new subscribers only 600,000 are going to pay $80 in January Now we are talking about some serious money. $48 million dollars in additional revenue. A number so small compared to Market cap, I don't see why 1 million extra prime members is such a big deal. I think I had read that the average prime user that pays for one year will leave after 3 years. So this is not something that will just keep growing.
I think there total number was 7 million new members this year. But I assume that 1 million will leave during trial period. So total revenue is about $500 million. That is not bad. Costco memberships account for almost all of Costco's earnings and with 72 million members that is roughly 3 billion dollars a year.
Amazon could have the same business model. But if so then stock price should be more tied to membership expectations. 70% year over year. It will take 2 billion members. let's be reasonable and say 500 million, because they have so many other services. So in just 6 short years the stock will be fairly valued.
I for one feel this stock is over priced for expected growth of 24% a year.
Okay sure it has a PE of 600. But we could easily see revenue double in 1 year with the prime rate hike. They are almost done building their infrastructure. With 70 billion in sales it is one of the largest already. Growth has been going down steadily each quarter and that is understandable. Next quarter might be 15% and next year 10% growth. I wonder if that is why Bezos has finally decided to earn money. Amazon can't keep growing by cutting prices. And I get what bezos wants a massive company that has savings of scale that match Walmart. But at some point the investors can't give money when the growth slows.
This company could easily earn $3 to $5 a share in two years. But with a 10%-15% growth rate I don't see a reason for a PE above 50.
My stance is that this company can make money, and a lot of it. But not as much as the market cap justifies.
I'm sorry but in my opinion this is a $250 share company. When earnings materialize and grow at 5% then that is a different story. And sure they grew by 1000% but that growth will only last a year.
When looking for a drop, you need the high valuation and a fundamental shift in company growth, profitability, new competitor. Otherwise traders like to believe that growth can continue to infinity until it doesn't. So this stock can go up for 2 more years.
I agree with you. But as long as Amazon does not turn a profit this company trades like it is a small cap stock.
To the parents out there claiming that UPS ruined Christmas. As a person that doesn't celebrate Christmas can somebody please verify for me that Christmas is about ordering new items 2 days before the event and then expecting it to be delivered across the nation to be at your doorstep the following day? I get that people buy presents for each other, but to wait last minute and complain that the shipper is at fault, seems like these people need to point fingers at themselves.
I think UPS did a great job shipping 20 -30 million packages in a single day. I couldn't do that. I think Amazon offers a nice product.
I think Amazon is a growing company and more people will use it, but I also think that the entry price into this business is small, and anybody can sell anything for any price and ship it with UPS. And for that reason Amazon will not be profitable. But now we have Amazon trying harder and harder to go into the shipping business. Good luck to that.
At the beginning of 2012 or at the end? Amazon's price appreciated 60% the company grew 24%. So was it under priced in January or was it over priced in December? Just curious how others feel about the company.
I picked up CMG at 501 last week before the sell off to 480 and I got mad at myself. I feel better now. I'm just saying.
It initially bottomed at 362 and slowly recovered to close down 18. I almost considered buying at 360. I might bite at 330.
True, but Amazon is growing. And investment is about growth. Then look at CMG. Theoretically each restaurant costs $10 million dollars. And earns $200,000 and will take 20 years for REO. Amazon is spending 3 billion a year, and earning $300 million when they eventually stop spending I would suspect their REO will be 20 years as well. But that is when they stop spending.
LNKD is a good short bet. Not today, but in a few weeks when it rebounds to 210. But the charts are showing a 9 point drop month over month. With a 10 point rally every 15 days. If charts hold true it will be back at 215 at the end of the month. And then 190 in March. It also may not be a bad bet to go long for a 2 weeks. And make 3%.
Sentiment: Strong Buy