Two Weirdly-Valued Stocks: If You Ignored Company Names, What Would You Think?

Two rapidly-growing technology-related stocks – OK, it’s Apple (AAPL) and Amazon (AMZN) – but one company has been outgrowing the other by a wide margin.

AAPL Revenue TTM Chart

AAPL Revenue TTM data by YCharts

One has a widening profit margins as it grows, suggesting healthy economies of scale. The other gives up profit margins with growth, suggesting diseconomies of scale or, very basically, selling dollar bills for 99 cents apiece.

AAPL Profit Margin Quarterly Chart

AAPL Profit Margin Quarterly data by YCharts

Despite this significant outperformance by one company, their five-year price gains are remarkably similar, as seen in a stock chart.

AAPL Chart

AAPL data by YCharts

The market would seem more focused on revenue (and its growth), even though for one company increases in revenue have been very low-profit (or no-profit), and the other mints money on its growth.

AAPL Price / Sales Ratio TTM Chart

AAPL Price / Sales Ratio TTM data by YCharts

Leading us to the oddest comparison of all, PE ratio. A dollar of Amazon profit costs an investor 350 times what she’d pay for a dollar of Apple profit.

AAPL PE Ratio TTM Chart

AAPL PE Ratio TTM data by YCharts

Jeff Bailey, The Editor of YCharts, is a former reporter, editor and columnist at the Wall Street Journal and New York Times. He can be reached at editor@ycharts.com.

Read more articles about: Company Analysis  

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