Amazon.com Inc. (AMZN)
Spreadsheet created on 6/25/2008
Ted Murphy <ted@vcastocks.com>
Long Term Valuation Parameters
This is how I come up with a long term target price:
Current date:		6/25/2008
Target date for long term valuation:		Dec, 2013	(5.5 Years)
Dec, 2013 Est EPS:		$3.93	< --- from the Income Statement worksheet (click below)
Target P/E Multiple (x EPS)		20
Target Price on P/E:		$79
Dec, 2013 Est Revenues (000):		$45,590	< --- from the Income Statement worksheet (click below)
Dec, 2013 Est Sales per share:		$107.52
Target P/Sales Multiple (x Sales)		1
Target Price on P/Sales:		$108
Dec, 2013 Target Price:		$93
Current Price:		$79.64
Expected Long Term Return:		17%
Annualized Return:		2.9%
Expected Long Term Annualized Return:
This is how I figure out what I will pay today:
Ann Return:	Buy AMZN at:
0%	$93	< --- long term target price
1%	$88
2%	$83
3%	$79
4%	$75
5%	$71
6%	$67
7%	$64
8%	$61
9%	$58
10%	$55	< ---  I want 10% annualized, so my Buy price on AMZN right now would be $55 or below.
11%	$52
12%	$50
13%	$47
14%	$45
15%	$43
16%	$41
17%	$39
18%	$37
19%	$36
20%	$34
21%	$33
22%	$31
23%	$30
24%	$28
25%	$27