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Originally Posted by Jason14h
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If you believe in the future all commerce and distribution will occur through Amazon, then how do you put a price/value on the company?
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By comparing it to similar businesses. Most analysts consider Apple, Alphabet and Facebook to be game changers justifying investors' optimism in their growth potential outpacing their current performance. So, their P/E valuations could be used as good comparables. Amazon's current valuation is almost 8 times higher than Google and 16 times higher than Apple. eBay is probably the closest online trading platform to Amazon and it trades at P/E of 5, which makes it the most undervalued and attractive stock in the group, by far. Amazon's valuation is 58 times higher!
As an anecdote, on my way to Idaho to see the solar eclipse, we stopped for three nights in Butte, MT. Amazon.com offers many items that are not available on amazon.ca, so I've ordered a few to be delivered to the hotel where we're staying. All arrived in separately packed boxes in one day free of charge to a small town in the middle of nowhere. Some of them were as small as $6. If I didn't like any of them, I would have been able to return them for free, no questions asked. Yes, as a consumer, I absolutely love amazon's selection and service. But, how do you deliver a $6 item via one-day courier from a distant warehouse for free and not lose money? It's hard to believe that Amazon can avoid a huge downward correction at some point.