Is This Upgrade Convincing?
3/25/2011 12:13:57 AM By RacingCar
The upgrade on AMZN came from William Blair & Co. Main reason: its competitive pricing and wide assortment.
The question is: will these two factors be strong enough to help AMZN win competition and justify ~60% expected growth rate based on PEG analysis? (see here: http://hotstock...).
For our information, Amazon's earning's growth rate is around 25-40% on a yearly basis. A lot lower than the 60% we mentioned above.
Amazon is gaining market share however those advantages have been there for a long time and they are reflected in Amazon's growth rate in the near past. Most likely they will not bring new additional growth in the future.
Conclusion: most likely Amazon will keep the 25%-40% growth rate in the foreseeable future. It is not losing, but perhaps not winning at a speed reflected by the stock price, for now.