With no commitment from Bezos or management to turn a profit and return capital to shareholders, Amazon is a stock investors should avoid. Plus, the company hasn't demonstrated any ability or desire to turn a profit.Īmazon's sole focus is growing revenues and expanding its business. Even when I take a long view of Amazon - and value it based upon 2016 EPS - shares trade at 30-times earnings.Įven that valuation is rich, when you consider that Amazon is growing its sales at 20% a year. Shares are trading at a P/E multiple of 112-times next year's earnings. There is no doubt that the stock is expensive. But that's a full three years away, and who knows what will transpire between now and then. By 2016, they're predicting EPS of $10.61. Estimates call for EPS to more than triple next year. With Amazon shares trading at $328 - just a few points below their all-time - investors are betting big on the company's future profits.Īnalysts also expect bigger profits from Amazon. Those are razor-thin profit margins, but are considerably healthier than Amazon's. Even with the cost of a huge physical presence, Costco operates with a 1.9% profit margin and Wal-Mart at 3.6%. Costco ( COST ) and Wal-Mart ( WMT ) are two of the biggest discount retailers in the U.S. While that may sound decent, that's a net profit of just $400 million - a profit margin of just 0.5%.Įven in the world of low-margin retail, that profit margin is tiny. This year, analysts estimate that Amazon will earn $0.86 per share. But they do show that Amazon is unprofitable. Last quarter, Amazon reported a net loss of $7 million, or $0.05 per share. But that begs the question: when will Amazon start making some real money ? And so it's reinvesting all of its cash in growth. No such thing exists.Investors have turned a blind eye to the company's lack of profitability, instead choosing to embrace the company's expansion into new product categories such as its high-end artwork, its development of the Kindle e-reader, and its cloud-computing service, Amazon Web Services.Īmazon bulls argue that the company is investing in its future by aggressively growing the business. (Notice, we did not say “gross-free” diaper rash cream. So if you simply can’t stand the way your current diaper cream feels, we can help you find a less gross product in our list that still works well. Some of these diaper rash products are more like ointments, and the consistency varies from product to product. (They’ll appreciate our sacrifices later when they’re jaded teen-agers, right?) Still, they’re a necessary part of baby care, so we have to put up with the goo. They sometimes have a sticky, pasty consistency that seems to end up everywhere, especially if you use cloth diapers. Now, we’re not going to try to convince you that these creams are as gross as the other parts of diaper changing. These creams soothe the skin and usually clear up the rash within a day or two. You need to have the best diaper rash cream on hand at all times. Babies can’t verbalize how bad this rash hurts, but they have ways to make it pretty clear. As babies wear diapers, the pH levels on the skin increase, sometimes leading to a bright red rash. Don’t ask.)īut wait: Diaper time can be even worse when diaper rash enters the equation. (I ended up with it sprayed across my eyeglasses once. Unless, that is, you like having sh*t on your hands, on the baby’s clothes, and everywhere in between. But no matter how adorable that little tushie can be, diaper changing time is not one of the great things to experience as a new parent. There are so many great things to experience when you have a baby.
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