Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Released Monday, 21st April 2025
Good episode? Give it some love!
Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Why Amazon's P/E Ratio is Misleading and the Right Way to Value Them

Monday, 21st April 2025
Good episode? Give it some love!
Rate Episode

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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Today’s show is sponsored by:Go to SHOPIFY.COM/beginners to start selling with Shopify today.

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What do Dave and Andrew recommend?

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.Have questions? Send them to newsletter@einvestingforbeginners.com

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