, Columnist
Amazon as a Value Stock? Believe It
It looks expensive, but the company’s disdain for Wall Street has made it cheap.
Such a deal.
Photographer: Dania Maxwell/Bloomberg
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By conventional measures of stock prices, Amazon.com Inc. looks very expensive. It’s actually surprisingly cheap.
Twenty-one years after it went public, a share of Amazon stock costs 70 times more than the company’s estimated per-share future earnings. That means investors are willing to pay much more for each dollar of Amazon’s earnings than for shares of Microsoft, Apple, Facebook, Alphabet or Alibaba. The everything store’s price-to-earnings ratio is four times higher than that of the S&P 500 index.