Amazon made $588 million in profits in 2004 on $7 billion in sales. This past year they made $596 million in profits on $107 billion in sales. Dumbass investors have rewarded its 0% profit growth over the last 11 years by driving the stock from $50 per share in 2004 to $586 per share today. And this is after a $54 plunge last week. This juggernaut has a PE ratio of 473. Amazon is proof that bullshit sells on Wall Street and Main Street. Bezos has been saying he’ll make it up on volume for 11 years, but it never seems to happen.
You will find more statistics at Statista
Love to see interest rates go up and up – that will stop them from borrowing to buy back stock. Then we will see the sucker go down.
“Mark to fantasy” is all you need know about Wall st. It’s for suckers.
Just wait till Bezos unleashes his long term plan and decides to buy, then park his carcass in the Oval Office for eight years!
Hey at least they’re not paying taxes. Now imagine what happens to AMZN when congress passes a law suspending the corporate income tax for a year as part of the next stimulus package? BOOM. Amazon suddenly stops reinvesting its revenue and releases it to the shareholders. This is the scenario that every amazon investor is probably hoping for… but unfortunately for them, AMZN is likely to be trading back under $100 by the time that stimulus comes, so the resulting rally, while huge, wont bring it back to where it is now.
Value is often the result of perception. When bullshit looks shiny, so many think it’s precious. Therein lies the illusion.
What caused them to lose profitability like that? The money is going somewhere.
HSF, I think they accomplish that miracle by selling shit cheaper and cheaper and shipping it for free. Plus they have a very liberal return policy. You can order the biggest, baddest TV and surround system, use it to watch the Superbowl then ship it back the following week for a full refund.
Costco used to allow the same kind of thing but modified their policy on returned electronics. I bought a 54″ plasma TV two weeks after Superbowl for $250 at a local discount store that sells Costco return items. The same TV was $1400 in Costco. The unit I bought still had the cling plastic film on it everywhere except the screen. The remote was still sealed in it’s plastic bag. They must have used a universal remote to operate it. This was 5-6 years ago and the TV still works perfectly. Plasma is so much crisper than LCD or LED too.
This is a comment on AMZN I shared with the subscribers of my short seller’s journal – this is color you won’t find in the financial media or Wall St.:
I wanted to include a brief comment on AMZN for subscribers before I start reviewing AMZN’s latest earnings report and update my AMAZON dot CON research report, as I know many of you are “stalking” AMZN as a short or may already be short the stock (or own long-dated puts).
A contact of mine sent me this comment below – he ran a business which was a product supplier Walmart and QVC plus he serviced the resellers who sell on AMZN:
I worked with Walmart and QVC for 10 yrs as a supplier, and had miniscule direct business with Amzn, we did service resellers, all total just 2% of our business. Their margin is 10% of Walmart so that leaves no room for growth. The new businesses are negative returns such as shipping, but growth is the selling point to Wall street.
With sales of Walmart falling, maybe AMZN can take some of their sales, but an online business is very difficult, especially with the [product] returns. One return will cost you the profitability of several other customer sales and return rates keep going up.
I wanted to share this because no one in the analytic community has been discussing the affect that product returns have on an online company’s margins. As it is, after the cost of fulfillment, AMZN loses money of most of its sales. The cost of handing returns further eats into any profit margin AMZN can manage to squeeze out of its operations. An increasing rate of returns has been a recent trend in retailing, especially for online sales.
As this person points out, Wall Street, hedge funds and daytraders only care about sales growth. Part of the reason AMZN stock was hit hard after earnings is that it missed Wall Street’s revenue forecast – and not by much. But this illustrates the affect slowing sales growth will have on AMZN’s stock price. At some point AMZN’s sales flatten out or even decline. That’s when the party is over for good for AMZN’s stock.
My AMZN dot CON report goes more in-depth into AMZN’s numbers and accounting schemes than any report available – it is unique. I will be reviewing AMZN’s latest numbers this week. Anyone who buys my report also gets the quarterly updates. I hate this Company and I won’t rest until Bezos is taken down for fraud: http://investmentresearchdynamics.com/amazondotcon/
Has anyone here tried the new AMAZON NOW service? Not sure how they would pull this off on a large scale.