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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (151034)	12/27/2002 2:12:29 PM
From: Alomex	Respond to of 164684

What is the difference between the top line growth rate and the operating expenses growth rate? For many years expenses grew right in line with the top line (hence the famous dollar bill for ninety cents analogy). However for the last twelve months or so this has no longer been the case. While margins overall are currently around 1%, the margin at the top is somewhere around 15% (give or take a few points). Which means that for every point in sales growth their profits go up as much as three points. This is why I think Amazon will see higher profits over the next few years to come. The question is how high? If they taper at $100-200 million (which is the likely scenario) this stock is trading at a five year forward P/E of 36-70! As far as the pro-forma figures are concerned, Amazon will likely be reporting hundreds of millions of dollars of profits a year as early as 2003.

To: GraceZ who wrote (151034)	12/27/2002 3:15:05 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 164684

I think that more and more will come to the realization that they are better off letting AMZN run their online stores and provide fulfillment services. This is their true growth path, not low margin books they started out with and it's only just beginning. The business looks bad enough that it doesn't attract much in the way of competition. This is exactly my point and imo the entire reason Amzn stock has rallied this year. This year amzn morphed from a retailer to a retail portal. It is somewhat ironic because I was once told their original business plan was to be just that, a retail portal with no direct fulfillment. That didn't work at first so they decided to hold inventory, then they went overboard and added too much fulfillment capacity... and now here we are again back to square one. The difference from what I can see between a retail portal and a portal is it is product driven with retailers lining up by general sku. That is my take on it anyway. Amazon is doing well with this, if they can hold circuit city who has their own site then there is definitely a value add with amzn. The product logistics are the wildcard. Right now amzn has extensive logistics and profitability in that business, similar to Dell. I'm not sure how that area of the business will grow in the future or if it will. This is the traditional retailer side. This year CNBC gave all this airtime to Holly Becker when she downgraded amzn at the beginning of the year (at $8) because they were more expensive than other traditional retailers. Where is the outrage about this disastrous call, is what I would like to know. It was obvious then that Amzn was not just a retailer. It will be interesting to see if amzn can grow their margins to yahoo levels. L