Amazon.com, Inc. (AMZN)’s Valuation Is Way Too High: Alexis Dawance

Amazon.com, Inc. (NASDAQ:AMZN) had got its approval from FAA for testing the drone delivery. But FAA has imposed a lot of rules which restrict the scope of testing. Meanwhile many investors believe that getting FAA approval for testing might boost the stock prices up. But, many other believe that the limited scope of this testing might not have any significant impact. Head of Equities at MFM Mirante, Alexis Dawance talked on CNBC about Amazon.com, Inc. (NASDAQ:AMZN) stock and why he thinks that this stock is overvalued.

Dawance’s general opinion is that Amazon.com, Inc. (NASDAQ:AMZN) stock is overvalued and he mentioned that it has nothing to do with the recent approval for drone delivery. He accepted the fact that Amazon.com, Inc. (NASDAQ:AMZN) is trying to do too much by venturing into multiple businesses.

“[..] The problem with Amazon today is that its an internet company that’s becoming a super market and its still trading at an internet level. So we mean that the valuation is way too high and probably one day investor would wake up and say why am I paying two times sales for retailer, while you can buy Walmart or other people at half time sales,” Dawance said.

Amazon.com, Inc. (NASDAQ:AMZN) had many failure with products like Fire phones and their Kindle was also not a big revenue generator. Dawance pointed out that Amazon.com, Inc. (NASDAQ:AMZN) has close to 150000 employees and cannot be considered as a small internet startup company. He thinks that only an internet startup company deserves a premium which Amazon.com, Inc. (NASDAQ:AMZN) is trading at currently.

Dawance said that the e-commerce giant is growing at a 13%, which he feels is very low for a high profile company like Amazon.com, Inc. (NASDAQ:AMZN). He pointed out that growth rate of Apple Inc. (NASDAQ:AAPL) is much higher and multiples are very low when compared to Amazon.com, Inc. (NASDAQ:AMZN).

Dawance accepts the fact that Amazon.com, Inc. (NASDAQ:AMZN) has changed the e-commerce industry, but he said that it was a long time ago. Now-a-days companies like Walmart has invested a lot in internet and enable online shopping. He feels that there is no differentiator in Amazon.com, Inc. (NASDAQ:AMZN) e-commerce these days.

Disclosure: None.

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