One-glance verdict
Overvalued
$170.59 our estimate vs market $244.85
Wall Street consensus: $313.13 (83.6% higher than our fair-value estimate)
44% above our estimate, beyond the bull case
Fundamentals snapshot
Amazon.com, Inc.
AMZN · NMS · Consumer Cyclical · Internet Retail
Current price
$244.85
52-week range
$196.00 - $278.56
Market cap
$2.63T
Balance sheet
Healthy
35.17x Strong cushion
Net debt $92.45B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 3.6% last year.
- Reward Returns 24.3% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
What this company does
Amazon.com, Inc.
Amazon is known for its massive online store, but it makes most of its profit from its Amazon Web Services (AWS) division. This part of the company rents out computing power and data storage to other businesses, which is a very high-margin business (meaning a large portion of every dollar in sales is pure profit). This is important because the reliable profit from AWS helps fund the growth of Amazon's retail side and allows it to expand into new areas.
How the company got here
Amazon started in 1994 in a garage in a suburb of Seattle, Washington. Founder Jeff Bezos left his job at a New York City investment firm to start an online bookstore, a choice he made to avoid regretting not participating in the internet boom. The company went public in 1997, meaning it started selling shares of its stock to the public. It soon expanded beyond books to sell music, videos, and a wide range of other products, earning it the nickname "The Everything Store". A major turning point was the launch of Amazon Web Services (AWS) in 2002, which is now a massive cloud computing business and the company's main profit engine.
What it actually does
Most people know Amazon as a giant online store where you can buy almost anything, from books and electronics to groceries and furniture. The company also owns physical stores like Whole Foods and Amazon Go. Beyond selling products, Amazon has a huge and very profitable cloud computing division called Amazon Web Services (AWS), which rents out computing power and data storage to other companies. It also makes money from advertising on its site, subscriptions like Amazon Prime, and by providing services to the millions of independent sellers who use its platform to reach customers.
North America
This is Amazon's largest business segment, covering its retail sales of all kinds of products and subscriptions in the United States, Canada, and Mexico. When you buy something on Amazon.com in these countries, whether it's sold by Amazon directly or by an independent seller, the revenue (the total money collected from sales) is counted in this segment. This part of the company makes up the biggest piece of Amazon's total sales, about 60%, and is also a major driver of its growth.
International
The International segment is very similar to the North America segment but covers the rest of the world. It includes all the money Amazon makes from selling products and subscriptions through its websites in countries outside of North America. While it's a smaller portion of the company's total sales compared to North America, it's a key part of Amazon's strategy to expand its retail business globally.
AWS (Amazon Web Services)
AWS is Amazon's cloud computing business, and it's the company's most profitable part. Instead of buying and managing their own computer servers, other companies—from startups to large corporations and even government agencies—pay AWS to use its vast network of data centers for things like data storage, computing power, and other tech services. While AWS brings in less revenue than the retail business, its profit margins (the portion of sales that turns into actual profit) are much higher, making it the main engine of Amazon's overall profitability.
Third-Party Seller Services
A huge portion of the items sold on Amazon aren't sold by Amazon itself, but by independent businesses and individuals. These are called third-party sellers. Amazon makes money from these sellers by charging them fees, such as a commission on each sale and optional charges for services like storing, packing, and shipping their products through a program called Fulfillment by Amazon (FBA). This is a very large and profitable business for Amazon, as over half of all items sold on the platform come from these sellers.
Advertising
Amazon has a rapidly growing advertising business. Companies pay to have their products show up as sponsored listings when you search for something on Amazon's website or app. This works on a pay-per-click model, meaning the advertiser only pays when a shopper clicks on their ad. Because Amazon knows what people are shopping for, it can offer very effective ad targeting, which makes this a very valuable and high-margin (high-profit) business for the company.
What management is betting on now
Amazon's leadership is heavily focused on expanding its most profitable business, AWS, especially by investing in artificial intelligence (AI) to offer new services to its cloud customers. They are also working to make their delivery network faster and more efficient to lower shipping costs. Another key priority is growing the high-profit advertising business and continuing to integrate AI across all its operations to improve everything from product recommendations to its supply chain (the entire process of getting a product to the customer).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$7.66B
FY2024 Q3
$3.35B
FY2024 Q4
$17.80B
FY2025 Q1
$-8.00B
FY2025 Q2
$332.00M
FY2025 Q3
$430.00M
FY2025 Q4
$14.94B
FY2026 Q1
$-18.17B
Revenue
$181.52B
Net income
$30.25B
Diluted EPS
2.78
Operating cash flow
$26.03B
Free cash flow
$-18.17B
Fetching…
Sources
Revenue
$213.39B
Net income
$21.19B
Diluted EPS
1.95
Operating cash flow
$54.46B
Free cash flow
$14.94B
Fetching…
Sources
Revenue
$180.17B
Net income
$21.19B
Diluted EPS
1.95
Operating cash flow
$35.52B
Free cash flow
$430.00M
Fetching…
Sources
Revenue
$167.70B
Net income
$18.16B
Diluted EPS
1.68
Operating cash flow
$32.52B
Free cash flow
$332.00M
Fetching…
Sources
Revenue
$155.67B
Net income
$17.13B
Diluted EPS
1.59
Operating cash flow
$17.02B
Free cash flow
$-8.00B
Fetching…
Sources
Revenue
$187.79B
Net income
$20.00B
Diluted EPS
1.86
Operating cash flow
$45.64B
Free cash flow
$17.80B
Fetching…
Sources
Revenue
$158.88B
Net income
$15.33B
Diluted EPS
1.43
Operating cash flow
$25.97B
Free cash flow
$3.35B
Fetching…
Sources
Revenue
$147.98B
Net income
$13.48B
Diluted EPS
1.26
Operating cash flow
$25.28B
Free cash flow
$7.66B
Fetching…
Sources
Is it cheap or expensive?
Fair value $170.59 vs current price $244.85
Wall Street consensus is the average analyst price target: $313.13 (83.6% higher than our fair-value estimate).
Our most-likely fair value is $170.59 a share — about 30.3% below today's price of $244.85, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net debt $92.5B. Interest coverage 35.2x.
Net debt
$92.45B
Interest coverage
35.17x
Amazon.com, Inc.'s profit covers its interest bill about 35.2 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
AMZN
BASELINE
Amazon.com, Inc.
Total debt $235.54B Interest coverage 35.17x This is the baseline the peer rows are being compared against.
Total debt $75.55B Interest coverage 10.66x -70% vs AMZN Carries about 3.3x less debt cushion than AMZN.
Total debt $41.62B Interest coverage 6.09x -83% vs AMZN Carries about 5.8x less debt cushion than AMZN.
Total debt $12.38B Interest coverage 20.01x -43% vs AMZN Carries about 1.8x less debt cushion than AMZN.
Total debt $15.96B Interest coverage 1.32x -96% vs AMZN Carries about 26.7x less debt cushion than AMZN.
What you should know
The case for and against AMZN
3 Rewards
0 Risks
Rewards
-
Revenue grew 3.6% last year.
-
Returns 24.3% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
29.57x
Forward P/E
24.69x
P/B
5.96x
P/S
3.55x
EV/EBITDA
17.49x
PEG ratio
1.30x
Profitability
How much profit each dollar creates
Gross margin
50.6%
Operating margin
13.1%
Net margin
12.2%
ROE
24.3%
ROA
6.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.53x
Current ratio
1.18x
Quick ratio
0.97x
Total debt
$235.54B
Total cash
$143.09B
Growth
How the business has been compounding
Revenue TTM
$742.78B
Revenue 5Y CAGR
11.1%
EPS TTM
8.28
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$148.53B
Free CF TTM
$7.70B
FCF margin
1.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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