While giving Amazon, the company, its due, Heller makes a reasonable value-oriented argument against AMZN the stock:
But what is in question is the value of the company. Is it worth 143 times next year's earnings, and 71 times 2015 estimates? What is the future for this company in terms of the bottom line? To increase sales rapidly is wonderful, but that ultimately needs to translate into meaningful earnings.
Well, that's if you believe as I do, that earnings matter. Do earnings matter, Rocco? Ultimately, shareholders will care. They may not right now; they are riding the gravy train of momentum. Do you really think that will last forever?
Yes. Possibly. It could. Because, as I will explain, value investors often have difficulty knowing when to separate company from stock and when not to.
Weinstein spews something similar to Heller:
Over time, on average, the basics work effectively to help shape a winning portfolio. I've heard and read many reasons why traditional valuation metrics no longer apply for certain high flyers over the years, but as a student of the markets for over 20 years, I've yet to find one that holds water.
And an emailer put it all together when he came at me with this:
You have written so many good articles about NFLX, but you think there is not a good well-though out bear case on a company that is almost valued more than 8 times the market cap of NFLX , and a company that has no earnings? Really? When is AMZN going to have $6B-$9B of earnings a year to justify the current price? Please let me know.