Google’s revenues increased 32% in 2012, and have seen Earnings Per Share (EPS) increase annually for over a decade. Google’s P/E is 3.5 lower than the industry average of 28.3, and its gross margins are 34% higher than the industry average. The company’s CEO, Larry Page, seems to be making decisions that appear to lead the company to the promised land.
Jeff Bezos has quickly become one of the most respected and acknowledged CEO’s in today’s society. In 2012, he was named as the top business person by CNNMoney.com, and Amazon.com, Inc. (NASDAQ:AMZN) should be proud to have him guiding them through the jungle of competition. The company has increased over 116% in the past five years, yet Amazon.com, Inc. (NASDAQ:AMZN) is probably the most obvious example of how metrics don’t necessarily relate to success. Jeff has developed a mindset of “It doesn’t matter how much profit there is, as long as there is some.” He doesn’t care if the company only makes ten cents per product, because the company will likely sell more products than anyone else.
Aside from its stock, revenue increases are about the only promising metric you can find when analyzing Amazon. After a decade of consecutive annual increases, they increased 27% in 2012, 319% in the past five years, and 1,160% in the past decade. Their EPS are in the negatives, their FCF yield is practically zero, and their P/E is -3,333 – but this doesn’t mean to sell the company. Jeff has made it very clear that his goal is not for immediate metrical success, but he encourages investors to think long term. Often times Tim Tebow would play horribly for the first three quarters, but find a way to win in the fourth quarter. Despite Amazon’s measly metrics, the company is focused on the long term achievement of success, which to them is the measurement of victory.
The chart below shows how successful these companies have been despite some (or many) questionable metrics.
The Foolish Conclusion…
Just like a good quarterback, leadership is often more important than numbers. Yes, some of these companies have both, but some are successful with metrics that make many investors cringe. Does it really matter how it looks, how it’s accomplished, or if it makes sense, as long as they are successful? Just remember, a company’s leadership and business models often drive success more than just a set of numbers.
We can’t control what happens with Tim Tebow and his questionable NFL career, but don’t be stuck sitting on the bench as these companies produce game changing performances.
The article How Tebow’s College Career Resembles These 4 Companies originally appeared on Fool.com and is written by Tyler Wofford.
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