Fundamentals snapshot
AMZN · NMS · Consumer Cyclical · Internet Retail
Current price
$246.03
52-week range
$196.00 - $278.56
Market cap
$2.65T
One-glance verdict
Fair-value range $47.01 – $172.88 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $312.79 (217.1% higher than our fair-value estimate)
Buy below $78.92 for a 20% safety cushion
Balance sheet
Net debt $92.45B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
View 1 more in details ↓What this company does
While most people know Amazon for its online store and Prime memberships, the company's main source of profit is actually its web services division, which rents computing power to other businesses. This highly profitable tech business generates a lot of free cash flow (cash left after paying operating costs and equipment spending), which helps fund the growth of the massive but less profitable retail side. This is a great example of how a company's most well-known product isn't always its biggest money-maker.
Amazon was started by Jeff Bezos in his garage in 1994 as an online bookstore. It went public in 1997 and survived the dot-com bubble burst, turning its first full-year profit in 2003. A key turning point was the launch of Amazon Prime in 2005, a membership program offering fast, free shipping that built incredible customer loyalty. The company then expanded dramatically, launching Amazon Web Services (AWS) for cloud computing in 2006 and the Kindle e-reader in 2007, moving far beyond just selling physical goods.
Most people know Amazon as a giant online store, sometimes called "the everything store," where you can buy almost anything and have it delivered quickly. Beyond its website, the company also owns physical stores like Whole Foods Market. It also produces movies and TV shows through Amazon MGM Studios, streams music, and makes popular electronic devices like the Kindle e-reader, Fire TV, and Echo smart speakers powered by its Alexa voice assistant.
This is Amazon's largest business segment, covering its retail sales in the United States, Canada, and Mexico. It makes money by selling products directly to customers from its own inventory and by collecting fees from other independent businesses who use its website as a marketplace to sell their goods. This segment also includes revenue from subscriptions like Amazon Prime, which offers benefits like fast shipping and access to streaming services. It represents the biggest piece of the company's total sales.
This segment is very similar to the North America business but serves customers outside of the U.S., Canada, and Mexico, with dedicated websites for countries like the United Kingdom, Germany, and Japan. It earns money from the same activities: direct online retail sales, fees from third-party sellers, and Prime subscriptions in those regions. While a significant part of the business, it has historically been less profitable than the North American and AWS segments.
This is Amazon's cloud computing division, and it's a huge and highly profitable part of the company. Instead of buying and managing their own physical computer servers, companies and governments pay AWS to rent computing power, data storage, and other technology services over the internet. This pay-as-you-go model is essential for everyone from small startups to large corporations. While it brings in less revenue than the retail business, AWS generates a very large portion of Amazon's overall profit.
A huge portion of the items sold on Amazon.com aren't sold by Amazon itself, but by millions of independent businesses, both small and large. Amazon makes money by charging these third-party sellers various fees to list their products and by offering optional services like using Amazon's warehouses and shipping network, a service known as Fulfillment by Amazon (FBA). This business is a major contributor to Amazon's retail success and revenue, making up a significant slice of total sales.
Amazon has a rapidly growing advertising business that makes money by selling ads to businesses that want to promote their products on its website and apps. When you search for a product and see results labeled "Sponsored," that's an example of this advertising. Sellers pay Amazon when a shopper clicks on their ad, a model known as pay-per-click (PPC). This has become a very profitable and important part of the company, leveraging the vast amount of data Amazon has on consumer shopping habits.
Amazon's leadership is heavily focused on Artificial Intelligence (AI), aiming to integrate it into every part of the business, from the shopping experience to the services offered by AWS. The company is investing billions in building its own AI computer chips and expanding its data centers to power this technology, seeing it as a massive opportunity for future growth. Another key priority is making its delivery network faster and more efficient by regionalizing its fulfillment centers to reduce costs and shipping times. Management believes these big bets will drive the company's next wave of innovation and profitability.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $312.79 (217.1% higher than our fair-value estimate).
Buy below $78.92 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $98.65 a share — about 59.9% below today's price of $246.03, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net debt $92.5B. Interest coverage 35.2x.
Amazon.com, Inc.'s profit covers its interest bill about 35.2 times over. which is stronger than every peer shown here.
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 $281.72B 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 $108.02B Interest coverage 1.32x -96% vs AMZN Carries about 26.7x less debt cushion than AMZN.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know