The P, price, must fall, while the E, earnings, continues to grow.
Q4 sales jump 22% on the strength of its e-book business, but earnings and 2013 outlook fall short of analyst expectations.
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But this also means that if they are lost due to the earnings test, i.e.
The E is relatively high now, and if earnings decline, which is very possible, stock prices could fall.
In its recently held fourth quarter earnings call, Amazon disclosed that its e-book business is now a multi-billion dollar business that is growing at 70% y-o-y.
He notes that the stock continues to trade at a discount to its peers, such as Kroger (KR) and Safeway (SWY) based on p-e ratios and price-to-EBITDA (earnings before interest, taxes, depreciation and amortization) multiples.
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Just days ahead of its fourth quarter earnings results on Feb. 21, e-mails from top management leaked to Bloomberg indicating a bust in February sales.
Amidst all the doom and gloom that has permeated the markets, the e-business concern has come up with some good news: higher-than-expected earnings.
The purchase price--13% of E-Trade's total equity at the time--was 174 times Telebanc's earnings for the year.
Tracking visits to e-commerce sites, he says, can sometimes pick up a company's sales numbers before it reports earnings.
On July 11, 2003, the firm's chief financial officer sent an e-mail to all employees, including Hertz, saying there should be no trading in Track Data shares until earnings were announced on Aug. 12.
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