One-glance verdict
Overvalued
$95.10 our estimate vs market $258.51
Wall Street consensus: $328.17 (245.1% higher than our fair-value estimate)
172% above our estimate, beyond the bull case
Fundamentals snapshot
Amazon.com, Inc.
AMZN · NMS · Consumer Cyclical · Internet Retail
Current price
$258.51
52-week range
$196.00 - $287.20
Market cap
$2.79T
Balance sheet
Watch
35.17x Strong cushion
Net debt $128.65B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 8.2% last year.
- Reward Returns 30.6% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Risk Forward P/E (24.9x) is higher than trailing (20.8x) - earnings are expected to drop.
What this company does
Amazon.com, Inc.
Amazon is known for its giant online store, but it makes most of its profit from its cloud computing division, Amazon Web Services (AWS). This part of the business rents computing power and data storage to other companies, which is a high-margin business (meaning a large chunk of every dollar in sales is pure profit). This profitable tech service helps fuel the growth of its massive but less profitable retail side, giving the company two powerful engines.
How the company got here
Amazon was started by Jeff Bezos in his garage in 1994 as an online bookstore. A key decision was to allow other sellers to list products on its website in 1999, which dramatically increased selection. Another major turning point was the launch of Amazon Prime in 2005, a membership program that made fast shipping a standard expectation for online shopping. The company also created Amazon Web Services (AWS) in 2006, which rented out its computing power to other businesses and has become a massive and profitable part of the company. Over the years, it expanded into selling almost everything, earning it the nickname "the everything store."
What it actually does
Most people know Amazon as a giant online store where you can buy everything from books to groceries to electronics. It also owns the grocery store Whole Foods and has some of its own physical stores. Beyond selling products, the company produces movies and TV shows through Prime Video and makes its own electronic devices like the Kindle e-reader and Echo smart speakers. A huge part of its business that many people don't see is Amazon Web Services (AWS), which provides the computing power for countless other websites and applications.
Online Stores
This is the part of Amazon people are most familiar with: the products it sells directly to customers on its website and app. This includes items that Amazon buys from manufacturers and then sells itself. It's the largest single piece of the company's sales, making up well over a third of its total revenue (the total money brought in before any costs are taken out). When you see "ships from and sold by Amazon.com" on a product page, you are buying from this part of the business.
Third-party Seller Services
This segment is a huge marketplace where millions of independent businesses and individuals sell their products directly to customers. Amazon doesn't own these products but provides the platform for the sale and, in many cases, handles the storage, packing, and shipping through a service called Fulfillment by Amazon (FBA). For providing this service and access to its massive customer base, Amazon charges these sellers fees and a commission (a percentage of the sale price). This part of the business is very large, accounting for more than half of all items sold on the site and making up the second-biggest share of Amazon's revenue.
AWS (Amazon Web Services)
AWS is Amazon's cloud computing division, which rents out technology infrastructure to other companies, from startups to large corporations like Netflix and NASA. Instead of buying and managing their own physical servers, businesses pay AWS for services like data storage, computing power, and databases over the internet. While it brings in a smaller portion of total revenue than the online stores, AWS is extremely profitable and is the main driver of Amazon's overall profit (the money left over after all expenses are paid).
Advertising
Amazon sells advertising to businesses that want to promote their products to the millions of people shopping on its site and app. These are often called "sponsored" products that appear at the top of search results or on product pages. Advertisers pay Amazon when a shopper clicks on their ad, a model known as pay-per-click (PPC). This has become a fast-growing and highly profitable part of the company, representing a significant slice of total revenue.
Subscription Services
This segment includes the fees from the Amazon Prime membership program, which gives customers benefits like faster shipping, access to the Prime Video and Amazon Music streaming services, and other perks. It also includes subscriptions for things like audiobooks through its company Audible. While not the largest part of its revenue, these subscription fees provide a steady and predictable stream of income for the company.
What management is betting on now
Amazon is heavily investing in Artificial Intelligence (AI) across all parts of its business. This includes making its AWS cloud platform the go-to place for other companies to build their own AI tools and improving its own logistics (the process of moving goods) with robotics and AI to deliver products faster and more efficiently. The company is also focused on expanding its healthcare services, such as Amazon Pharmacy, and growing its presence in international markets like India. These bets require massive spending on things like new data centers to power AI, but the company believes they will drive future growth.
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 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
FY2026 Q2
$-8.82B
Revenue
$200.61B
Net income
$62.65B
Diluted EPS
5.75
Operating cash flow
$45.39B
Free cash flow
$-8.82B
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $95.10 vs current price $258.51
Wall Street consensus is the average analyst price target: $328.17 (245.1% higher than our fair-value estimate).
Our most-likely fair value is $95.10 a share — about 63.2% below today's price of $258.51, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $128.6B. Interest coverage 35.2x.
Net debt
$128.65B
Interest coverage
35.17x
Amazon.com, Inc.'s profit covers its interest bill about 35.2 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
AMZN
BASELINE
Amazon.com, Inc.
Total debt $251.64B Interest coverage 35.17x This is the baseline the peer rows are being compared against.
Total debt $128.81B Interest coverage 50.88x +45% vs AMZN Carries about 1.4x more debt cushion than AMZN.
Total debt $75.09B Interest coverage 10.66x -70% vs AMZN Carries about 3.3x less debt cushion than AMZN.
Total debt $39.72B Interest coverage 6.09x -83% vs AMZN Carries about 5.8x less debt cushion than AMZN.
Total debt $84.34B Interest coverage 33.83x -4% vs AMZN Has roughly the same debt cushion as AMZN.
What you should know
The case for and against AMZN
3 Rewards
1 Risk
Rewards
-
Revenue grew 8.2% last year.
-
Returns 30.6% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Forward P/E (24.9x) is higher than trailing (20.8x) - earnings are expected to drop.
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)
20.80x
Forward P/E
24.86x
P/B
5.05x
P/S
3.59x
EV/EBITDA
17.27x
PEG ratio
1.52x
Profitability
How much profit each dollar creates
Gross margin
50.8%
Operating margin
13.7%
Net margin
17.4%
ROE
30.6%
ROA
6.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.46x
Current ratio
1.03x
Quick ratio
0.84x
Total debt
$251.64B
Total cash
$122.99B
Growth
How the business has been compounding
Revenue TTM
$775.68B
Revenue 5Y CAGR
11.1%
EPS TTM
12.43
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$161.40B
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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