Why Internet stocks are still so extremely overvalued?

Discussion in 'Stocks' started by crgarcia, Nov 17, 2008.

  1. Amazon PE 27.84
    Baidu PE 32.46
    Google PE 18.37
    Yahoo PE 16.33

    Maybe investors are still in denial that earnings are now, and always will be low?

    Only Ebay has an adequate PE of 8.73 (entry barriers are low for Internet stocks and the market is overpopulated, so they must have quite low PEs)
  2. JamesJ


    BIDU dropping like a stone today
  3. Still not enough.
  4. wHAT'S SO overvalued about these PE's ?

    There are high barriers to entry in the space. You can't just go out there and start an eBay or Google competitor overnight.
  5. Yes, you can.

    Besides, all of them, Google, Yahoo, Ebay, Amazon, may start to compete against all others.
    Google may well take the market share of Ebay and Amazon, for example.
  6. One advantage of some of the large web companies, is they can

    Google and Amazon started payment services recently to compete with Paypal. Of course, Amazon already had large sales it could give to its new payment provider. Google had a huge presence and name power. Even Microsoft could some day. Paypal has a large market value.

    Google is trying to take over Microsoft functionality. That is one of the reasons it started its own browser, Chrome.

    Wouldn't be surprised to see Google start something to rival EBay and/or Amazon, function for funtion.

    I always thought that Amazon should have used its former huge market value to buy Borders or Barnes&Noble way back. The synergy would have been great, as both companies started their OWN online site... Amazon STILL could start its own bricks & mortar chain. it already has the logistics, distribution, warehouses...
  7. Google was started in some basement not too long ago.

    All it takes is a few sharp kids from Stanford to come out with a better google than google and it could quickly over take Google. Just like Google overtook Yahoo.

    Tech moves fast.
  8. birdman


    Goodyear = 4.11
    Murphy Oil = 4.78
    Wendys / Arbys = 4.66
    Alcoa 4.63
    Harley Davidson 4.54
    Cummins 4.45
    Dennys 4.40
    Ruby Tuesday 4.37
    Macys 4.25
    Marathon Oil 4.18
    JC Penny 4.02
    Dominos Pizza 3.95
    ConocoPhillips 3.83
    Smurfit Stone 3.78
    Earthlink 3.63 - that's internet related
    PC Mall 3.40
    Abercrombie & Fitch 2.93
    Books-A-Million 2.63
    Corning (good ole GLW) 2.51
    Amkor 2.14
    United States Steel has a market cap of 3.33 billion and a pe of 1.82 (stock symbol X) so to save you the trouble
    Retail Ventures (apparel stores) pe .63
    Federal-Mogul .36
    DryShips .41
  9. US Steel with 1.82 PE, thats insane. Nucor I think is a better company though.

    MSFT and INTC both under 10.5 PE.
  10. Google is a tremendously profitable company. I wouldn't bet against it...
    #10     Nov 18, 2008