Amazon.com, Inc. (NASDAQ:AMZN)
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Once simply an online purveyor of books, Amazon.com has become a marketplace for just about anything you’d want to buy.
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Once simply an online purveyor of books, Amazon.com has become a marketplace for just about anything you’d want to buy.
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Take a look at Amazon's top line growth. This in a nutshell is the goal of management -- to grow Amazon's customer base into the stratosphere for purposes of retail dominance in the future (of both physical and digital goods). They are sacrificing margins now to kill off the competition and accelerate the growth of their business.
Taking this into account, I hope it's understandable why its very high P/E multiple is actually more than acceptable. Imagine if the market valued Amazon at 50 Billion dollars (half of the current market cap)? Based on the P/E argument many people put forward, 50 B (or even less) is where they want to value the future of retail...
I don't know about you, but to me and many others, it's extremely convenient and worthwhile ordering from Amazon -- even in Canada where the prices are quite a lot higher.