Sunday, March 17, 2013

AMZN: Amazon Is Cheaper Than You Think

Amazon Is Cheaper Than You Think
by Josh Arnold

Amazon's (AMZN) valuation has been the source of much debate here on Seeking Alpha and other venues. Critics will argue that Amazon's outrageous price to earnings ratio is a reason why the stock is overvalued. Supporters of the stock reference its incredible growth rates as the reason the stock will climb ever higher. Putting emotion and biases aside, however, we can use operating cash flows as a more relevant way to value Amazon shares. As Amazon makes little to no GAAP net income, valuing the stock by the conventional price to earnings ratio is challenging and misleading. read more »

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