Main Reason / TLDR: Amazon’s P/E is high, because the market is pricing Amazon as a tech company (with high future earnings potential from high margin products/services), on Amazon’s present lower earnings as a retail company (low margin, high revenue retail sales).
Is it better to have a higher or lower P E ratio?
Generally speaking, a high P/E ratio indicates that investors expect higher earnings. However, a stock with a high P/E ratio is not necessarily a better investment than one with a lower P/E ratio, as a high P/E ratio can indicate that the stock is being overvalued.
What is Amazon’s PE ratio?
Amazon.com PE Ratio. : 91.09 (As of Today)
Why is a high P E ratio good?
A higher P/E ratio shows that investors are willing to pay a higher share price today because of growth expectations in the future. The high multiple indicates that investors expect higher growth from the company compared to the overall market. A high P/E does not necessarily mean a stock is overvalued.
Is Amazon overvalued 2019?
Fundamentally, Amazon is overvalued with a P/E ratio of 81.12 without offering a dividend, according to Macrotrends. Amazon reported strong earnings on April 25, and the stock responded by setting its 2019 intraday high of $1,964.40 on May 3.