Amazon is currently valued at 1.29 billion USD market capitalisation.
In my opinion, Amazon's true intrinsic value is around 700 billion USD.
As of today, Amazon's Price/Earnings ratio is 114.
To substantiate such a valuation, Amazon's revenue has to grow with 20 % for 12 years and achieve a net profit margin of 17 %, at least, compared to the current average yearly profit margin of 4 % for Amazon in the last few years.
The online merchandising market is growing and huge in yearly revenue, but the growth rates are not as big as before and they are going to decrease. Cloud computing is a huge business, where Amazon with Amazon Web Services is a leader with 22 % market share.
In both online merchandising and cloud computing, there is always the danger that a new hot technology startup will emerge and take a large market share from Amazon. Much like Google did with Yahoo and Facebook did with the whole market for internet advertising.
The money printing of leading central banks in the last 10 years created the biggest technology bubble in history, much larger in market capitalisation than the previous dot-com bubble in 1996-2021.
The music, sooner or later, will stop and to quote Warren Buffett "when the tide turns, it will be seen who is swimming naked".
Yes, if one times the market correctly, huge riches can be made. But stock market timing has been historically, notoriously difficult.
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