Amazon.com, Inc. (AMZN) Message Board

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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 244.41

+0.6%

Nov 7 9:30 AM EST

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To: Robert Rose who wrote (94877)	2/25/2000 4:41:00 PM
From: Bearded One	of 164684

Some numbers for everyone: Bulls assume that the companies they are buying are not overvalued because they will 'grow' into their valuation. Ok. Let's assume that the companies in question will grow at some unkown rate for 5 years. After 5 years, they settle down to 'only' 20 percent earnings growth year after year. Ignoring the fact that earnings are not dividends, that would justify a P/E of 20 five years from now assuming bonds are around 4-5 percent. Here are some high-flyers. The first column is the name of the stock. The second column is the current share price. The third column is the needed earnings for five years from now assuming steady growth. The fourth column is the share price assuming that earnings grow 20 percent starting this year. Stock Price Earnings needed Share price if Earnings in 5 years to only grow 20 percent/year justify price YHOO $165 $8.25 $2.00 QCOM $135 $6.80 $18.00 AOL $60 $3.00 $8.00 MSFT $92 $4.60 $32.00 CSCO $138 $6.90 $18.00 AMZN $69 $3.50 $0 (no earnings yet) People-- Look at that fourth column. It is just as likely as the third column.

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