Without selling $1 worth so far, AMZN Fresh has essentially IPO'd at $7B .... if they are lucky enough to earn 1% net, it will take the first $700B in sales to meet investor expectations ....
That argument has not worked for AMZN .. shipping costs have continued to outpace revenue every Q and will continue to going forward - irrespective of the fulfillment rollout. It is not only due to gas cost/fedex/UPS increases (and FC distance), but also AMZN revenue per unit / shipment is also decreasing, making shipping costs a higher and higher % of revenue.
This is why AMZN has had to spend billions on new FC centers, but they are chasing their tail. They have been trying to find new revenue drivers which adds SKu's, which also makes each FC less efficient .. all adds up to less efficiency with increased size (proven over past 4 years in financials), not the economies of sclae predicted by analysts. Groceries will only make that equations worse - except this time, they are beginning with lower margins.
People need to be reminded what this company is: A very weak cash flow company with significantly diminishing growth that reduces quidance each Q.
Short volume has been huge last couple of weeks, and look they are all covering on Fri and today. Huge short squeeze right now started by the big boys buying on Thursday aft to push shorts (and put buyers) in the red. They will sell back once the last weak short has been roasted.
Op CF ignores all of the "investment" AMZN had made in Capex (Fulfillment centers, new HQ, AWS, internal software development, etc..). So - that is what you can expect from AMZN after the investment (2% op CF yield .. less than 10 yr t-bill)
Got it - thanks. Total volume does not match the daily traded regular hours trading volume - it is off by a lot (and they exclude the AH trading). Do you know wht the during hours trading does not match actual?
osulinn - you're too generous. AMZN TTM Fee Cash Flow is just $1.1B.
You have to total all of their FCF since start of 2009 to exceed $4B ($4.6B). It has taken them over 4 years to genererate $4.6B. That is an average of $1.1B per year. So they are trading at more than 250x FCF. What a bargain at 0.4% FCF yield?!
You would get a better return in a 3-YR t-bill (0.52%) with no risk.
Yep - I just closed out my short puts with a nice gain this morning. Going to sell more puts on Monday aft, after the typical Monday pull back.
go figure. this pig does have wings. It it closes above $275.78 today, I look for it to test its all time high prior to earnings of $284.
MKT Cap up so far today $2.8B
CY10 - CY13 FCF = $1.9B
My favorite Chart I have developed (data from E*Trade):
2013 EPS FCT, Stock Price, 2013 FWD P/E
Jan 2011 $5.75, $180.00, 31
Jan 2012 $3.20, $173.10, 54
Jan 2013 $1.76, $250.87, 143
Apr 2014 $1.48, $262.00, 177
Jun 2014 $1.29, $267.83, 208
So in 2011 when investors thought AMZM EPS was $5.75 they applied a 2-YR FWD P/E of 31 (reasonable) for a $180 stock price. Flash forward to today: CY13 EPS estimate has dropped by 78%, while the stock is up 49%. AMZN business now valued at 208x CY13 earnings (a 6x increase from 2 years ago).
Let's look at this another way. Current analysts consensus CY15 EPS estimate is $6.70. Apply that same 31x 2-YR FWD P/E, and you get a target of $207.70 (22.5% decrease from yeaterday's close). The new 2-YR FWD P/E of 40.0 is being placed on company that is both growing slower and is much less profitable than it was in 2011.
How do you think this will hold up in a market correction? AMZN has already been consolodating/distributing for the past 7 months while the market has been screaming ....
My conclusion ... Look out below
This week's update: CY13 brought down 2c (to $1.29), CY14 brought down 5c to $3.20. CY14 P/E keeps going up on reduced growth expectations .. now up to 83.7 ....
Longs: You are being frog-boiled as the slow erosion in estimates hides the changes and artifically keeps the price up (they don;t have to downgrade to the incremental changes each week), until their is a massive correction one day to make up the price difference.
Wow Geeg - you may get it today - let's see if it closes above that point, through I doubt it becuase this looks like a pump and dump day.