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by jandrewrogers
1631 days ago
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PE ratios are only meaningful for comparing companies with no revenue growth, which is well-understood by investors. For companies with insanely high revenue growth, like Amazon, a PE ratio is essentially meaningless because that growth is financed with earnings. The fact that Amazon is only trading at 3.7x revenue is a strong argument that it is underpriced given its revenue growth, not overpriced. |
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