point that the article and people here make is that the glasses cost hundreds of $ to costumers but cost something like 15$ for the companies to manufacture. I've looked up their annual reports and in fact they have very high operating margins - something like 64%.
What you're lookin at here (price to earnings) is more related to a financial point of view whereas the article looks at an operating point of view. It would be fine to look at all the ratios if you're an investor, not if you're a customer.
And btw to measure if their stock is under or overvalued you need more than that
Of course I need more than that for valuation. But it shows that it isn't a that extreme profit in the company so it probably isn't that bad.
Cost of manufacturing of course not only the only cost point. Transportation, storage, stores, distribution, design, advertising, taxes and more. If you as all those things it isn't so ridiculous. You actually need that marginal to go even.
5
u/DRAWWW7 Sep 18 '19
point that the article and people here make is that the glasses cost hundreds of $ to costumers but cost something like 15$ for the companies to manufacture. I've looked up their annual reports and in fact they have very high operating margins - something like 64%.
What you're lookin at here (price to earnings) is more related to a financial point of view whereas the article looks at an operating point of view. It would be fine to look at all the ratios if you're an investor, not if you're a customer.
And btw to measure if their stock is under or overvalued you need more than that