A Fundamental Look: Apple, Google, Amazon, Netflix and eBay

Joel Anderson  |

With Apple (AAPL) shooting into the top spot as the highest valued company in the world and Google (GOOG) also clearing $200 billion in market cap despite only debuting as a public company just eight years ago, tech appears to be the sector that has the zeitgeist behind it. While the other major blue-chips trading remain some of the same names that we've been looking at for years, the technology sector appears to be able to rapidly elevate new champions in a matter of years.

But because so much of success and failure in the tech sector rides on questions of innovation and future trends, it's easy to overlook the sort of core valuations that people often rely on when evaluating stocks. While P/E or PEG ratios may not be as important to a tech firm as other companies when projecting the future value of a stock, they're still worth comparing. So, here's a look at some of the hottest tech stocks core valuations.

Apple (AAPL)

Market Cap: $564.99 billion   P/E: 16.98   Forward P/E: 12.00   PEG: 0.89   P/S: 4.35   P/B: 6.17   P/C: 18.43   P/FCF: 14.74

Apple's sky high price still isn't too high based on its projections for growth as its Forward P/E and PEG are both attractively low. The fact that it has a $100 billion cash reserve and still has a P/C ratio over 18 could be a concern, but the P/FCF is also still attractive. Despite a share price that's cleared $600, Apple might still be cheap if it continues to grow as projected.

Google (GOOG)

Market Cap: $210.42 billion   P/E: 21.60   Forward P/E: 12.90   PEG: 1.15   P/S: 5.51   P/B: 3.59   P/C: 4.68   P/FCF: 18.78

Google paints a picture fairly similar to that of Apple, though at a much lower price. While the P/E is fairly middle, the Forward P/E of 12.90 is attractive and the PEG of 1.15 also speaks to strong growth projections. Where Google could look much better than apple is in its P/B, which speaks to much stronger underlying assets (Google's book/share is close to 180 while Apple's is lower than 100), and it also has a more attractive P/C ratio.

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Amazon (AMZN)

Market Cap: $92.31 billion   P/E: 142.36   Forward P/E: 73.60   PEG: 4.95   P/S: 1.85   P/B: 11.45   P/C: 9.27   P/FCF: 42.43

Pretty much any way you cut the cake, Amazon is an expensive stock. It's P/E clears 140, and its Forward P/E and PEG don't seem to show the same sort of growth projections Apple and Google had. However, the one bright spot comes in Amazon's P/S, which comes in at just 1.85. Amazon is clearly a growth play at this point, with the trend away from brick-and-mortar in retail making some believe that Amazon is the Wal-Mart (WMT) of the future. However, even if one believes that to be the case, buying in now is coming at a steep price.

eBay (EBAY)

Market Cap: $48.95 billion   P/E: 15.02   Forward P/E: 13.94   PEG: 1.20   P/S: 4.11   P/B: 2.66   P/C: 8.07  P/FCF: 20.71

The San Jose, CA-based online auction house could easily be seen as the value-play alternative to Amazon. It could also ride the wave of a shift to online retail sources while simultaneously offering much better valuations than Amazon. It's P/E, Forward P/E, and PEG are all attractive while the P/B of 2.66 speaks to stronger underlying assets than Amazon. That being said, its P/S ratio is considerably higher than Amazon's.

Netflix (NFLX)

Market Cap: $6.75 billion   P/E: 28.82   Forward P/E: 47.69   PEG: 1.65   P/S: 2.08   P/B: 10.36   P/C: 8.35  P/FCF: 36.42

No offense, but shouldn't a company that's lost about half of its market cap over the last year be more attractively priced? While Netflix doesn't offer the sort of sky high prices that Amazon does, it's still troubling to see that even after the much-publicized, fairly catastrophic collapse the company suffered last year it still has a P/E ratio close to 30 and a Forward P/E higher than that. Netflix is a very popular company to short as many see it facing continued headwinds, but the shift online for most consumers' entertainment dollars might still create the sort of wave that could return Netflix to profitability and a bright future. That being said, investing in Netflix would have to be viewed as a growth play at this point.

Data from finviz.com

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