Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them
Confused by Amazon’s PE ratio? Financial educator Brian Feroldi breaks down the six stages of a company’s life and reveals why traditional valuation metrics often fail. Learn how to analyze any stock, avoid common mistakes, and discover the tool that makes investing easier for everyone.
[00:01:00] Why PE ratio fails for Amazon and growth stocks.
[00:03:00] The six stages of a company’s business lifecycle explained.
[00:07:00] How to spot startups and hypergrowth companies in the market.
[00:11:00] Self-funding phase: when companies stop needing outside capital.
[00:13:00] Operating leverage: profits grow faster than revenue here.
[00:16:00] Capital return phase: dividends, buybacks, and mature companies.
[00:19:00] Three key numbers to identify a company’s current stage.
[00:26:00] Why Amazon’s valuation needs a different metric approach.
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Andrew works really hard to find the best insights he can every single month at Value Spotlight. To see a sample of his previous work, go to stockwriteup.com.
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The Investing for Beginners Podcast - Your Path to Financial Freedom
We make the complicated stock market simple. We show you how to take advantage of the emotions in the market with lessons from successful strategies such as value investing and dividend growth investing, with a few elements of growth investing and trend following.
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