$AMZN
A friend asked me if I thought $AMZN 's rise over past few years was ridiculous
Spent some time looking at the fundamentals and I conclude that no, it ISNT ridiculous.
I think it's reasonable & seems to be tracking ok
Here's why
Short thread...
A friend asked me if I thought $AMZN 's rise over past few years was ridiculous
Spent some time looking at the fundamentals and I conclude that no, it ISNT ridiculous.
I think it's reasonable & seems to be tracking ok
Here's why
Short thread...
Lets start with sales and go back 4 years
About 4 yrs ago
Rev $150B, P/S was 3.4x and price ~ $1,000
Today, rev has roughly tripled ($443B) and so has the price (~$3,300)
P/S (red line) is now 3.8
A bit higher than 4yrs ago but not ridiculously higher
About 4 yrs ago
Rev $150B, P/S was 3.4x and price ~ $1,000
Today, rev has roughly tripled ($443B) and so has the price (~$3,300)
P/S (red line) is now 3.8
A bit higher than 4yrs ago but not ridiculously higher
Next up - Free Cash Flow
4 y ago:
FCF $7.6B, P/FCF 62x, Price ~ $1,000
If you go to Dec 20 (before they ramped capex spend)
FCF had more than tripled (~$24B) and voila - price also tripled. P/FCF similar at 65x
Today P/FCF looks crazy but thats bec FCF is abnormally low
4 y ago:
FCF $7.6B, P/FCF 62x, Price ~ $1,000
If you go to Dec 20 (before they ramped capex spend)
FCF had more than tripled (~$24B) and voila - price also tripled. P/FCF similar at 65x
Today P/FCF looks crazy but thats bec FCF is abnormally low
Lets keep a beady eye on their share dilution
Well, over past 4 yrs its gone up from 482M to 506M
A whole 5% - or a compounding of only 1% pa.
So Rev & FCF PER SHARE growths (what we care about as investors) have been similar to the actual Rev & FCF growth
Winner, winner !
Well, over past 4 yrs its gone up from 482M to 506M
A whole 5% - or a compounding of only 1% pa.
So Rev & FCF PER SHARE growths (what we care about as investors) have been similar to the actual Rev & FCF growth
Winner, winner !
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