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

To: Alomex who wrote (38821)	2/8/1999 5:03:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164687

So AMZN falls squarely into the gray area of 3-5 years where you might or might not short it. Alomex, I have no plans to short it. I promise:-) Margins in the book business and in e-commerce seem to be paper thin (3-6%) therefore, the current valuation of AMZN presumes yearly sales of 11,200 to 22,400 million dollars. On the optimist end at 6% margins and growing at 35% per quarter it would take them exactly three years from now to justify their market cap. If we consider a conservative 3% margin and 30% per quarter growth (if you could call that conservative) it would take them four and a half years to justify their valuation. So AMZN falls squarely into the gray area of 3-5 years where you might or might not short it. It is interesting to see that using this measure AMZN has become even more overvalued, as a percentage of sales, than what it was a few years back when revenues were but a small percentage of their current levels. You are also assuming that AMZN can command enough gross margins to produce net margins of 3-6%. Projection for earnings were 3-5 years out a year ago but that is no longer the case. That may be why AMZN appears more overvalued now. Are you long AMZN? Glenn