Amazon.com, Inc. (NASDAQ:AMZN)

Valueeqanalyst (< 20) Submitted: 10/1/2012 11:03:51 AM : Start Price: $254.80 AMZN Score: +10.89

Amazon can either meet revenue growth expectations or margin growth expectations but probably not both. The stock trades at a very, very high multiple (even factoring in the growth) given that at the end of the day it's a retailer. Just for context, WMT has NI margins of about 3%, that's where AMZN can hope to get to. If the firm doubles revenues ($45 x 2 = $90b), then expands margins to 3%, that's earnings of $2.7b, on a $115b market cap that's a 45x multiple. Just too high. It'll take time, but a few misses can really punish the stock. Intrinsic value is probably about half of the current px ($125).