OPINION: Amazon, despite its high valuation by the traditional price-to-earnings ratio, is a bargain stock for long-term investors. And this may be a perfect time to consider making a purchase, Philip van Doorn writes.
Amazon.com, despite its high valuation by the traditional price-to-earnings ratio, is a bargain stock for long-term investors. And this may be a perfect time to consider making a purchase. iframe.twitter-tweet { width: 100% !important; } The forward price-to-earnings ratio is the current share price divided by the consensus earnings-per-share estimate for the next 12 rolling months.
If we look back over the past five full years, Amazon’s earnings per share have increased at a compound annual growth rate of 101.8%. That compares to an EPS CAGR of only 3.4% for the S&P 500. But enough with looking back. We can look ahead and compare Amazon with other very large tech-oriented companies for a better picture of how inexpensive its shares are.
Sticking with Apple as an example, the company’s consensus calendar 2021 EPS estimate among analysts polled by FactSet is $5.19 and the consensus EPS for calendar 2024 is $6.05. Those numbers would make for an EPS CAGR of 5.2% from 2021 through 2024. The closing price for the stock on May 17 was $126.27, so the P/E based on the consensus 2024 EPS estimate would be 20.9. The PEG ratio is the P/E divided by the CAGAR of 5.2, or 4.0.
Amazon is tied with Netflix Inc. NFLX, -0.21% for the lowest 2024 PEG ratio of 0.8. But Amazon shines even brighter with the highest expected EPS CAGR from 2021 through 2024.
Indonesia Berita Terbaru, Indonesia Berita utama
Similar News:Anda juga dapat membaca berita serupa dengan ini yang kami kumpulkan dari sumber berita lain.
23 Products From Amazon Canada That’ll Clean And Tidy Your Car Once And For AllNew whip, who dis?
Baca lebih lajut »
40 Father's Day Gifts You Can Get On AmazonFrom sneakerheads to outdoor enthusiasts, we have you covered.
Baca lebih lajut »
40 Father's Day Gifts You Can Get On AmazonFrom sneakerheads to outdoor enthusiasts, we have you covered.
Baca lebih lajut »
15 Products From Amazon That Reviewers Swear Help With Soap ScumCleaning products so powerful, you'll literally forget what soap scum even is after using them. It'll be like Eternal Sunshine, but for your bathroom.
Baca lebih lajut »
29 Things Under $50 From Amazon Canada That You'll Probably Want To Gift To YourselfTBH, they're already in my cart.
Baca lebih lajut »