Source: Someone who thinks Amazon’s EV is >10 less than what the people putting their money on the line do
I wonder how all this reduction in spending is going to hit their P/E. At 36, it’s not low, but it’s not high.
“valuation” is commonly used to refer to a company’s market cap. Using it to describe ev/ebit is highly misleading.
Valuation typically refers to P/E, but this is an acceptable compromise as Amazon very famously has always traded for a uniquely high P/E and investors who purchase Amazon often use EV/EBIT or similar to make the case of it’s relative value despite how expensive it is in introductory finance measures like P/E.
4 comments
Source: Someone who thinks Amazon’s EV is >10 less than what the people putting their money on the line do
I wonder how all this reduction in spending is going to hit their P/E. At 36, it’s not low, but it’s not high.
“valuation” is commonly used to refer to a company’s market cap. Using it to describe ev/ebit is highly misleading.
Valuation typically refers to P/E, but this is an acceptable compromise as Amazon very famously has always traded for a uniquely high P/E and investors who purchase Amazon often use EV/EBIT or similar to make the case of it’s relative value despite how expensive it is in introductory finance measures like P/E.
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