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a_c_s

Interesting to compare to the other Trillion dollar company:

Apple (AAPL) earned $11.04/share last quarter and trades for ~$228 today

Amazon (AMZN) earned $12.63/share last quarter and trades for ~$2,040 today

edit: formatting

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For a more complete picture:

Amazon

    Revenue		52.89B	39.34%
    Net income		2.53B	1186.29%
    Diluted EPS		5.07	1167.5%
    Net profit margin	4.79%	821.15%
    Operating income	2.98B	375%
    Net change in cash	2.92B	-
    Cash on hand	19.82B	50.14%
    Cost of revenue	30.63B	30.62%

Apple

    Revenue		53.26B	17.3%
    Net income		11.52B	32.14%
    Diluted EPS		2.34	40.12%
    Net profit margin	21.63%	12.66%
    Operating income	12.61B	17.12%
    Net change in cash	-13.09B	483.36%
    Cash on hand	31.97B	72.16%
    Cost of revenue	32.84B	17.64%

Revenue for Amazon is climbing faster than for Apple. And Amazon's cost of revenue is growing significantly slower than revenue while Apple's costs of are growing slightly more than revenue.

Could someone explain the math here. So amazon is worth almost 500 times their income!? That doesn't make any sense even if they are growing like crazy and investing their profits or something.

Net Income, not Income

They traditionally operate on low net incomes so they can kill other products with low or negative margins, and own entire categories, instead of wasting funds paying taxes and shareholders.

> They traditionally operate on low net incomes so they can kill other products

Or as Walter White says in Breaking Bad. "Corner the Market, then increase the Price. Basic Economics."

Amazon has historically been evaluated against their revenue instead of income.

By these metrics Apple seems pretty undervalued IMO

Can someone explain whether "Diluted EPS" / Diluted Earnings Per Share is significant in valuing a stock, and also how that number is calculated and used in investing?

Amazon's #s in this regard are over 2X Apple's but there is a %age that is showing 1167% for Amazon vs 40.12% for Apple. What does this mean?

    Amazon  Diluted EPS		5.07	1167.5%
    Apple   Diluted EPS		2.34	40.12%

More useful with the approximate shares outstanding:

Apple: 4,915,138,000

Amazon: 485,227,000

Thats taken into account in earnings/share.

True, but the GP specifically called out the difference between eps and share price of the two companies "interesting", which makes it looks like share price is an interesting number independent of the number of shares issued. It is not.

Earning per share and cost per share are useful to look at as a pair regardless of the number of shares issued. It's the return on capital. Tells one something regardless of market cap.

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