tag:blogger.com,1999:blog-8152901575140311047.post3060336199218299149..comments2024-03-28T08:16:22.230-04:00Comments on Musings on Markets: The Disruptive Duo: Amazon and Netflix!Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8152901575140311047.post-61033585004501305642016-07-12T08:16:24.509-04:002016-07-12T08:16:24.509-04:00I just saw this post and downloaded your spreadshe...I just saw this post and downloaded your spreadsheet which does not have an assumptions page, but only the final output. My question is how did you arrive at your Sales/Cap ratio for Netflix?<br />Thank you<br /><br /> <a href="http://splendidgroup.in/must-read-splendid-lake-dews-project-review-near-begur-lake-bangalore/" rel="nofollow">splendid lake dew review</a><br />Be the onenoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-44759594304382073222016-04-22T07:54:17.749-04:002016-04-22T07:54:17.749-04:00Could you please tell what kind of simulation do y...Could you please tell what kind of simulation do you use?<br />Is ut something like Monte Carlo simulation or what?Nursultannoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-11686940079167493502016-03-04T14:39:43.211-05:002016-03-04T14:39:43.211-05:00I just saw this post and downloaded your spreadshe...I just saw this post and downloaded your spreadsheet which does not have an assumptions page, but only the final output. My question is how did you arrive at your Sales/Cap ratio for Netflix?<br />Thank youAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-62116595535319102732016-02-20T06:41:29.867-05:002016-02-20T06:41:29.867-05:00I have not looked at Tesla in a long time and I wi...I have not looked at Tesla in a long time and I will some time in the first half of this year. My narrative for Tesla is still jelling, as it makes the transition from auto company to energy company, a very different business with pricing dynamics that indicate a large market but slim margins.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-25316714320643249102016-02-19T16:49:01.731-05:002016-02-19T16:49:01.731-05:00Professor,
You wrote:
'Just the mention of ...Professor,<br /><br />You wrote: <br /><br />'Just the mention of those companies cleaves market participants into opposing camps. In one camp are those who believe that those who invest in these companies are out of their minds and that there is no way that you can justify buying these companies, perhaps at any price.'<br /><br />This reminds me of Tesla, a highly controversial stock you discussed in the past.<br /><br />I would be interested in hearing your opinion or update as of 2016, now that Tesla launched Tesla Energy and is on the verge of unveiling its mass-market Model3 car in late March 2016.<br /><br />PS: I already left a comment about revisiting Tesla but it looks like wasn't published and eaten in the spam folder.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-50668289451261098852016-02-18T13:48:22.470-05:002016-02-18T13:48:22.470-05:00First of all, congratulations for another great po...First of all, congratulations for another great post. I really enjoy reading your valuations and I learn a lot. I work in a media company and I really liked this one, but I have to admit that I have experienced different reactions while I readed this post: The first one was skepticism as treating content streaming (not acquisition) as an operating expense is some kind of a-b-c of media valuation (as far as I know). Once I have understood what you made (I hope I've done it, but I have to admit that this one was not an easy one) I think it is smart and logical but muy be no so relevant. <br />In my opinion the main leverage of the value of your model is the target profit margin, wich actually changes from 15% to 25%. If I have understood it right, these +10 bps are much more that amount that you have added to the operating margin (1.608 Mill. $ Vs 25.979 Mill. $ in 2025 would mean +6.2 pbs) With a target margin of 21,2% the company values 46,68 per share which is not so far from the GAAP valuation. <br />Do you think that my comment makes some kind of sense or am I missing something? Thank you in advance and congratulations againAnonymoushttps://www.blogger.com/profile/14867576701823274279noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-91813929072929788202016-02-17T21:47:56.973-05:002016-02-17T21:47:56.973-05:00Anonymous,
The primary driver of my updated story ...Anonymous,<br />The primary driver of my updated story is that I decided that I should fix the GAAP accounting for technology and content investments, which improves Amazon's margin. The continued growth of that business gives me more hope that Amazon can continue to improve margins as a company. Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-52803255148677358002016-02-17T21:46:29.183-05:002016-02-17T21:46:29.183-05:00Evan,
You may be right and I might be reading too ...Evan,<br />You may be right and I might be reading too much into small moves. For the moment, there is really no proof that Amazon is more profit-focused than it used to be. Just a nagging suspicion. As for the NY Times article, I must tell you that I found it a little over blown. I believe that Amazon is a driven company but the article made it sound inhumane. If it were that bad, why are so many people clamoring to work at the company? Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-50999947329924921262016-02-17T19:42:20.380-05:002016-02-17T19:42:20.380-05:00Great post! Really looking forward to the rest of ...Great post! Really looking forward to the rest of this series.<br /><br />One nit to pick: your comment regarding Amazon's recent layoffs is misleading. As reported in the New York Times' infamous takedown article from last Fall [1], Amazon regularly identifies and lays off "underperformers". They're known to be one of the most layoff-happy companies among the latest generation of big consumer internet firms. The recent round in question marked the first time layoffs had occurred specifically at its Lab126 division, rather than the company as a whole.<br /><br />[1] http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.htmlEvan Meagherhttps://www.blogger.com/profile/18202633935528318015noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-39420207692355420122016-02-17T16:31:32.418-05:002016-02-17T16:31:32.418-05:00For the Netflix/TWC and Amazon/Walmart charts, you...For the Netflix/TWC and Amazon/Walmart charts, you didn't label the Y axis.<br /><br />Am I correct in assuming that it is market cap?<br /><br />Another great article, I look forward to them every week.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-36844736532614219292016-02-17T14:09:34.972-05:002016-02-17T14:09:34.972-05:00Prof D:
Might be interesting to get your view of v...Prof D:<br />Might be interesting to get your view of valuation of some cyclical names that are or near distressed levels: KMI, FCX among the many.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-88816433027740004692016-02-17T13:48:14.177-05:002016-02-17T13:48:14.177-05:00 Assuming that there is still room for revenue gro... Assuming that there is still room for revenue growth (especially in Amazon’s media and cloud computing business) and margin expansion (to 8.80%, the weighted average of the margins in the retail, media and cloud business) gives me an updated story for Amazon<br /><br />Is that EBIT margin? If so, you use a lower number in your valuation start point for EBIT %.<br /><br />ThanksAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-33970954203432401202016-02-17T10:44:28.412-05:002016-02-17T10:44:28.412-05:00Great post as usual, Professor. Amazon and Netflix...Great post as usual, Professor. Amazon and Netflix are intimidating companies to try to value and it's very insightful to see your thought process on themMTnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-59674295581679136512016-02-17T10:07:14.492-05:002016-02-17T10:07:14.492-05:00Hey, I find the sideways text in some of your flow...Hey, I find the sideways text in some of your flowcharts are rather challenging to read on a monitor.Ryanhttps://www.blogger.com/profile/04314718042663866972noreply@blogger.com