Amazon (AMZN) Valuation And The Great E-Commerce Debate

By Douglas A. McIntyre Published Dec 14, 2:04PM EST

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The online e-commerce business is booming this year. The total value of goods bought online is up 19% for the period from November 1 through December 11 to $20.49 billion. This past Monday total sales hit $880 million for the day, up 33% over last year.

The head of online research firm comScore said online holiday spending was on track to hit the firm’s $29.5 billion forecast.

That is one side of the story. The other is presented by Bloomberg: "Online sales in November and December may rise 20 percent, a record low for the industry, and slower than the 26 percent pace of a year earlier." In other words it is nice that online spending is up, but it has slowed enough to create real concern.

With two sides to the debate, it would be good to have a proxy. The largest e-commerce website is Amazon (AMZN). It had 57.6 million unique visitors in October. That makes it almost twice the size of Wal-Mart.com (WMT).

Over the last month, Amazon shares are up 17%. The Nasdaq is flat for that period. Wal-Mart’s shares up up about 5% which probably reflects concerns about store traffic for the holiday season. Rival Target (TGT) is down 7% for the period.

But, if e-commerce is sick, Amazon shareholders are fools.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.