E-Commerce Companies
Look for the YOY change of:
a. Number of new users
b. Revenue generated per user
c. Overall revenue growth
d. EBIT (operating) margin trend
Robert Peck of Bear Stearns observed that North American gross margins "contracted significantly" even when adjusting for the "Harry Porter" impact.
"If those trends remain consistent, then significant margin expansion is likely to be a challenge for Amazon to achieve," he wrote in a report Wednesday. "Further, we continue to believe that Amazon will ultimately have to reaccelerate technology and content spend in order to remain competitive."
e. Amazon: Free cash flow= operating cash flow - capex; it acts as a proxy for operating profit
f. eBay: transaction revenue per listing, which indicates the amount of revenue generated by each item posted for sale at the website. Improving monetization is the biggest driver of revenue growth.
g. Faster growing companies: Gross merchandise volume = total value of all goods sold
h. For valuation, look at EBITDA multiple instead of P/E
General info:
EPS boosters are:
a. Higher revenues
b. Lower costs
c. Lower tax rate
d. Lower share count due to share repurchases
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