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Your Valuation
10 June 2008 |
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Valuation Details
| Member: | TheCrunchBlog |
| On: | 07 Jul 2008 |
| Views: | 187 |
| Comments: | 1 |
| Updated: | 31 minutes ago |
| Ticker: | AMZN |
| Market: | NASD |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/07/is-amazoncom-really-worth-over-70-a-share/
Our assumptions of revenues for the next three years are US$19.5 billion in 2008 increasing to US$29.5 billion in 2010. We have projected EBITDA margins increasing from 7% in 2008 to 8% in 2010.
We have used a terminal growth rate of 5%. Our view is that AMZN’s growth beyond 2010 will slow – but there is a distance to go yet. Our numbers project 2009 to 2010 revenue growth of 23%. This assumption has a significant impact on the valuation. If you believe AMZN has better future prospects – this will positively impact the valuation.
We have used a WACC (discount rate) of 10.5%. The WACC (discount rate) has a material impact on a discounted cash flow valuation (as does the terminal growth rate).
We used a terminal capital expenditure number of US$350 million. In our opinion capital expenditure should stabilize around this number.