• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Visual Summary Of AMZN: 263x PE Multiple, 1.2% Operating Margin, $7 Million Net Income And 69,100 Employees

Tyler Durden's picture




 

Amazon's AH stock price may be up or down, or sideways, but here are the three charts that make us scratch our heads as we valiantly try to explain how a company which just said it will have 'Operating income (loss) inbetween $(350) million and $(50) million" and currently has a 263x P/E, is worth anywhere close to where it is trading.

First, here is AMZN's total employees and worldwide sales growth. The blue line is self-explanatory. The red one shows that the firm has grown its employees by 150% in the past two years.

Next, here is AMZN's Trailing Twelve Month Operating Margin, which has collapsed from just under 5% to just 1.2% in the past two years, and its TTM Net Income, which at last check was $377 million, which fits about 263 times inside its market cap of $100 billion.

Finally, here is what AMZN's quarterly operating profit and net income were. At June 30, the company with 69,100 employees and over $54 billion in LTM net sales, posted... $7,000,000 in Net Income.

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Thu, 07/26/2012 - 16:42 | 2654532 slaughterer
slaughterer's picture

The Tao of Amazon can be summed up in one sentence:

Profit is for pussies.  

Thu, 07/26/2012 - 16:42 | 2654536 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Earnings are for sissies.

Thu, 07/26/2012 - 16:47 | 2654573 Central Bankster
Central Bankster's picture

But here is the rub, in a completely manipulated market, which is constantly being fed new money to purchase securities, who cares if a company even makes money.  The whole market is a casino and it is entirely the fault of the Fed for not allowing assets to be priced based on cashflow and earnings, because that requires the market ponzi to collapse.

Thu, 07/26/2012 - 22:48 | 2655448 Buck Johnson
Buck Johnson's picture

Yep, and they can't allow that or the whole Western banking system would collapse and so would the US economy.  They are doing everything they can to keep this system going.  Some say that they are trying to start a WWIII.  I would say yes but that is insane.  To cover up the economy going under by starting a massive war that we may or may not win is crazy. 

Fri, 07/27/2012 - 04:52 | 2655683 fatcat
fatcat's picture

it's not that crazy. there is no "we" in the banker circles. they are hedged, and play both sides of any war. regardless of who wins, they benefit.

war has been used to "kick start" economies (aka create more debt) in the past. why not again?

Thu, 07/26/2012 - 16:48 | 2654579 AldousHuxley
AldousHuxley's picture

valuation is for the masses

 

 

Thu, 07/26/2012 - 17:22 | 2654702 Rainman
Rainman's picture

hahaha.....what bad can possibly happen to a public pension fund overweight on a 263 PE ??? 

Thu, 07/26/2012 - 17:22 | 2654703 Stoploss
Stoploss's picture

Ahh, i get it, all the fired ex govt employees go to work for amazon whorehouse, er, wharehouorse, er.

Let me guess, amazon's benny's are real close to gov't benny's.

Thu, 07/26/2012 - 18:49 | 2654946 mjk0259
mjk0259's picture

Not even close, they don't even provide A/C in the warehouses and people work like dogs with no beeny's.

Thu, 07/26/2012 - 21:57 | 2655373 zyby
zyby's picture

Those employees are soon to be replaced by robots...

Thu, 07/26/2012 - 17:59 | 2654807 Never One Roach
Never One Roach's picture

Only 'the little people' worry about revenues.

Thu, 07/26/2012 - 20:56 | 2655246 max2205
max2205's picture

Amazon taco. Empty.

Govt secretly keeping them alive so they can delivery the mail when the USPS get shut the fuck down.

Thu, 07/26/2012 - 17:01 | 2654591 Daily Bail
Daily Bail's picture

For what it's worth, back in 2000, as the internet meltdown was upon us and Maria Bartiromo was in treatment for Bubble Psychosis, I built a short position of 84,000 shares in Amazon for a fund I was managing.  It turned out to be a decent 6-month trade (made 15%). The value then was about 1/5 of the current market cap.  Glad I got the F out.

Meanwhile, this bit of news could be a gamechanger in the Corzine case.

Look for a Special Prosecutor to be appointed in the next few weeks. Obama buddy Jon Corzine's luck might finally be starting to run out.


CORZINE CRONYISM BOMBSHELL - High Ranking DOJ Lawyers And AG Eric Holder Were Partners In Firm That Represented MF Global
Thu, 07/26/2012 - 17:05 | 2654649 The Monkey
The Monkey's picture

These crooks get shuffled around because they know too much.

Thu, 07/26/2012 - 18:18 | 2654841 NotApplicable
NotApplicable's picture

Bombshell? Special Prosecutor?

*checks HuffPo main page*

Lead Story? (all about Romney looking dumb in the UK)

*clicks on politics tab*

Lead Story? (all about Romney looking dumb in the UK, but with a different pic and headline)

Until it shows up on these pages, it ain't shit as far as "scandals" go.

Perhaps you were meaning to refer to Kristen Stewart?

Thu, 07/26/2012 - 16:53 | 2654600 azzhatter
azzhatter's picture

The Obama business model - no profit

Thu, 07/26/2012 - 17:15 | 2654683 Ese Pinche
Ese Pinche's picture

Employees are for the ignorant

Thu, 07/26/2012 - 19:14 | 2655010 William Murderface
William Murderface's picture

Multiple expansion!  Bitchez!

Thu, 07/26/2012 - 20:30 | 2655182 Need More Cowbell
Need More Cowbell's picture

But I use Facebood and Netflix and Amazon so shouldn't I but the stock???  Gag.

Thu, 07/26/2012 - 20:31 | 2655188 eclectic syncretist
eclectic syncretist's picture

How true.  The problem is amazon has been a high-flyer for so many years there's no telling when the collapse in P/E will come

Fri, 07/27/2012 - 11:02 | 2656569 SoCalBusted
SoCalBusted's picture

I was nervous when it was at $90 and cashed out!

Fri, 07/27/2012 - 04:24 | 2655675 Azannoth
Azannoth's picture

That's what you get when the CEO of your Company is an Idealist

And some people bitch about firms putting profits before people, sure just do it the other way around and see how quickly you hit the pavement

Thu, 07/26/2012 - 16:59 | 2654535 ZerOhead
ZerOhead's picture

It's heading south fast...

With 69,000 employees and tanking income numbers it's time for Amazon to get hooked up to the Fed's discount window before it's in Mexico or Brazil or something...

Thu, 07/26/2012 - 16:42 | 2654537 flacon
flacon's picture

Yikes!

Thu, 07/26/2012 - 16:43 | 2654544 Chuck Bone
Chuck Bone's picture

Hopium: $220 new, $24 used

Thu, 07/26/2012 - 16:44 | 2654547 unwashedmass
unwashedmass's picture

and it is climbing after hours......i have gold and silver miners selling for pennies that make more than Amzn......

Thu, 07/26/2012 - 16:57 | 2654626 Not Too Important
Not Too Important's picture

The PPT at work. Long ink.

Thu, 07/26/2012 - 17:27 | 2654720 JustObserving
JustObserving's picture

Only thing that can save the miners is China starts buying them.  The pressure on gold and silver to stay down is immense.  Asians are buying gold and silver but not fast enough to match paper silver and gold being sold.

Why are the Europeans not buying gold and silver in quantity now there is a threat of printing by Draghi?

Thu, 07/26/2012 - 18:20 | 2654848 NotApplicable
NotApplicable's picture

Interesting thought that the only thing preventing tin-pot dictators from nationalizing everything might be cutting a deal with the Chinese instead.

Not that either will benefit mankind...

Thu, 07/26/2012 - 16:44 | 2654550 cougar_w
cougar_w's picture

Hey don't knock it. Any of us would be well with 7 large.

Thu, 07/26/2012 - 16:44 | 2654552 Dr. No
Dr. No's picture

 

"That's the thing about greed, Arch. It's blind.And it doesn't know when to stop."

 

Thu, 07/26/2012 - 16:45 | 2654556 kaa1016
kaa1016's picture

...all that and the stock is still $217. WTF...

Thu, 07/26/2012 - 16:45 | 2654557 same old story
same old story's picture

What 's the big a deal.   So they have no profits, that is so old school.  

Thu, 07/26/2012 - 17:02 | 2654642 Not Too Important
Not Too Important's picture

I was just watching Cavuto on Fox. They showed a daily DJ chart, down just before the close, with a green number, plus sign and green arrow up.

The chart clearly showed the opening was higher than the number they gave. Do they think no one looks at the chart to see if it matches their numbers?

Then Cavuto was saying they lost the feed to Draghi. Twice. The snippet that did get through was Draghi blaming the whole mess on the Americans.

From this I deduce two things: that the Europeans are getting ready to fight the Americans for reparations for their collapse, and Fox thinks their viewers are stupid.

From this I declare two things: Europe won't get a dime of my money, and I won't watch Fox anymore. One small step for man, . . .

Thu, 07/26/2012 - 16:46 | 2654565 azzhatter
azzhatter's picture

very expensive distribution model- it's really tough to sell low cost stuff via internet. Shipping costs as much as product in many cases

Thu, 07/26/2012 - 16:49 | 2654581 devo
devo's picture

And they're charging tax on some items. It's a disaster. I noticed everything I've ordered off the site in the past month has taken forever to ship. Like two weeks. They must be trying out some new method...maybe partnerships with third party wholesalers or something. It's not working--I canceled my order rather than wait 2 weeks for a shipment.

Thu, 07/26/2012 - 16:53 | 2654601 Abiotic Oil
Abiotic Oil's picture

Yep.  I've noticed a siginificant slowdown as well.  It is especially prevelant among their non-Amazon vendors, affiliates or whatever.  I keep ordering something that shows "in stock" from the vendor for a very low price, then the item doesn't ship, then order is cancelled.

I think the vendors are trying to rely on JIT inventory and don't actually order the "in stock" item until the customer orders it.  Then the distributor is out of stock and nothing ships.

Then I get pissed and stop being a customer.

Thu, 07/26/2012 - 16:55 | 2654615 devo
devo's picture

I think the vendors are trying to rely on JIT inventory and don't actually order the "in stock" item until the customer orders it.  Then the distributor is out of stock and nothing ships.

Exactly, it feels like order fulfillment by demand now.

Thu, 07/26/2012 - 18:34 | 2654894 pursueliberty
pursueliberty's picture

Dealing with this right now on a cell booster I ordered for the inlaws.

Amazon show three packages shipping.  One arrived three days after ordering, which was a simple 25' cable, the other two still have no arrival date, credit card charged.

Has drop shipped written all over it, though it didn't appear to be a outside vendor I was purchasing from.  Cable came in amazon box.  This is my first issue, but I hope it isn't the start of a problem.  Ebay and other means will be cheaper after they start charging tax in many cases.

Next step is to set up a shipping hub in northern Mexico to find lower wages.

Thu, 07/26/2012 - 18:41 | 2654923 NotApplicable
NotApplicable's picture

Northern Mexico you say?

Hmm.... there might just be some product in that area that can improve their margins.

Thu, 07/26/2012 - 21:30 | 2655320 grid-b-gone
grid-b-gone's picture

I like Amazon as a customer but recently found a couple items in local brick & mortar stores at lower prices, even after sales tax, time, and gas.

AMZN is convenient, but not always the best value.

Thu, 07/26/2012 - 18:08 | 2654815 Never One Roach
Never One Roach's picture

The proposed taxing internet sales at the state level, and increased postal costs will further crush American businesses and shove the economy furhter into a recession from what I read. In fact, I think the coming sales tax will be the final, severe knockout blow to several stores that are barely alive now, live Sears and JCP and Macy's. Their physical stores are empty. When their internet sales plunge, kiss them goodbye with the hundreds of thousands they employ.

The law of unintended consequences will bite these states who patied for years and are now desperate.

Thu, 07/26/2012 - 16:47 | 2654570 kito
kito's picture

rumor has it that bernanke, in an exclusive deal with amazon,  will be distributing digital dollars to all citizens via the kindle......

Thu, 07/26/2012 - 18:33 | 2654890 Bobbyrib
Bobbyrib's picture

If Amazon weren't losing money on Kindles, that would be an excellent deal for them.

Thu, 07/26/2012 - 16:47 | 2654571 devo
devo's picture

$25-35 stock.

Takes a lot to shoot down high flyers. I don't know how you hold the bag and think it's going to grow into that multiple rather than cut bait now.

 

Thu, 07/26/2012 - 16:48 | 2654576 azzhatter
azzhatter's picture

My kid dabbles in selling stuff via ebay. He was telling me last night he sold something for $375.00 and it cost him $250.00 to ship it. Heavy metal piece. Imagine selling $10.00 stuff and paying $12.00 to ship it

Thu, 07/26/2012 - 16:50 | 2654583 AldousHuxley
AldousHuxley's picture

craigslist

no fee, no shipping cost, all cash transaction

Thu, 07/26/2012 - 16:52 | 2654593 azzhatter
azzhatter's picture

good for local stuff, I agree. But he is selling specialty stuff and demand is nationwide. Shipping costs will eat you alive

Thu, 07/26/2012 - 21:06 | 2655277 jerry_theking_lawler
jerry_theking_lawler's picture

this 'inventory management' binge has gone too far.....example: a piece of my plant equipment went down wednesday (broke a belt which costs $15.00). Had to get it overnighted to have the equipment up and running to make production....cost $40.00.

but with accountants, inventory analyists, maintenance and purchasing specialists....i spent $55 dollars for an item that would cost $15 plus lost production because some genius didn't want to purchase it and keep it on hand (on the books as inventory/capital)....

makes no logical sense.

Thu, 07/26/2012 - 18:46 | 2654938 NotApplicable
NotApplicable's picture

Unfortunately, it has an extremely high scammer to legitimate respondent rate. My wife and daughter have been using it to clear out a lot of stuff we no longer need, and they deal at least five frauds for every real person.

Then, even many of the real people seem incapable of completing a transaction, or even responding in a timely fashion. Instead, they'll get an email a month or so later.

Local Quickswap group works well though, as there plenty of regulars who work as market-makers in the spirit of Fred G. Sanford.

Do NOT follow this link or you will be banned from the site!