business

What are you doing, Amazon?

I’ve been questioning Amazon for years.

Now others are noticing it, too:

How over-valued is Amazon’s stock? Compare P/E (share price / earnings per share) ratios:

  • Amazon: 3,500
  • Google: 23
  • Oracle: 16
  • Microsoft: 15
  • Walmart: 14
  • Apple: 10
  • Exxon: 10

(All the other companies make money.)

Apple, Microsoft, Google, Amazon compared

Here is a chart comparing the Net Income of each company for the past five years:

net quarterly income

Here is a chart comparing the stock performance of each company for the past five years:

Screen Shot 2013-01-24 at 7.28.03 PM

Here is some commentary about the charts:

  • Everything makes sense. Except Amazon’s stock price. Geez.
  • I’d like to see Samsung in the charts (but I couldn’t find their quarterly profits for the past five years, and they are not traded in the US).

Why is amazon’s P/E 3,000?

The past week, amazon.com’s P/E has been around 3,000.

3,000.

Apple is around 13. Microsoft is around 16. Google is around 21.

Amazon doesn’t make money, yet their P/E is 3,000.

Amazon has the 2nd highest P/E in the world (after Lamar Outdoor Advertising, which also doesn’t make much money. Kior has negative earnings, so they don’t actually have a P/E).

I really don’t know what is going on.

(Though I know something is.)