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

To: trouthead who wrote (7800)	6/26/1998 5:22:00 PM
From: Henry Wolfond	Respond to of 164684

So what you're saying is that the total sales has more to do with justifying the current price than actual earnings? Barnes and Noble (based on market cap) sells at less than 1X trailing sales. Amazon sells at over 20X sales. Book sellers don't enjoy great margins. Amazon's margins are skinnier than Barnes and Noble's to begin with. Amazon makes 20% gross (B&N makes 30%) and I'm figuring Amazon will make less than 2% net once they break through the cost of running the joint (including incremental increases in overhead proportionate to sales). $5 billion in sales = $100 million in profit. None of this takes into account the inevitable price war (as we've seen in online brokerage) as to where the cheapest place to buy books on the net is. Based on sales and factoring in exponential growth, Amazon might be worth $1 billion more or less (still more than double B&N) or $20 per share today. It's just plain old napkin math but sooner or later some analyst has to get it.