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

The Investing for Beginners Podcast - Your Path to Financial Freedom

Andrew Sather & Glassbox Media

Business, Investing

4.2 • 1.5K Ratings

🗓️ 21 April 2025

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

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. Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening. Today’s show is sponsored by: Go to SHOPIFY.COM/beginners to start selling with Shopify today. Check out the Stock Simplifier here: Stock Simplifier. 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 [email protected] SUBSCRIBE TO THE SHOW Apple | Spotify | YouTube | Amazon | Tunein For sponsorship inquiries, reach out to us at [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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1:02.4	Love this podcast because it crushes your dreams and getting rich quick.
1:05.9	They actually got me into reading stats for anything.
1:08.4	You're tuned in to the Investing for Beginners podcast.
1:12.2	Led by Andrew Saver and Dave Ahern. Step-by-step premium investing guidance for beginners.
1:19.5	Your path to financial freedom starts now. Start now.
1:30.0	All right, folks, welcome to Investing for Beginners podcast.
1:33.7	Today we have a special show.
1:34.9	We have our friend Brian Faraldi back.
1:37.5	Brian is a financial educator and co-founder of long-term mindset and also probably one of the best minds on Twitter,
1:46.2	LinkedIn, YouTube, and so on.
1:48.7	So he's here to talk to us about why is Amazon so freaking expensive or why do we think
	...

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