True, but based on our logic and math, it has to grow 5x to break even. Apparently everyone "knows" it's going to grow 6x soon. It just seems to me there aren't any discounts being applied for risk.
While I have no doubt amazon can grow 5x, I do have some doubt as to timeframe. If it did it this year I'd be happy to own it at these prices. I think it's probably at least 5-10 years from that. 0-20% return over that timeframe isn't very good.
That makes amazon overpriced by, what, 25%? Which is not particularly shocking. Lots of stocks are a bit overpriced. AMZN is popular. Don't buy it. Shrug.
When you compare a 3000 P/E to a 20 P/E, you might come away thinking amazon is overpriced by a factor of 100, which would be shocking. But I don't think there's any reasonable case that it's overpriced by a factor of more than 2.
Depends. If you think it's growing 10x, then it is discounted. I arrived at 5x by working back from the stock price, doesn't really mean that's the "right" answer. I'm not trying to justify amazons price, just explain what the people who do believe in it are thinking.
While I have no doubt amazon can grow 5x, I do have some doubt as to timeframe. If it did it this year I'd be happy to own it at these prices. I think it's probably at least 5-10 years from that. 0-20% return over that timeframe isn't very good.