One-glance verdict
Overvalued
$78.29 our estimate vs market $262.37
Wall Street consensus: $331.72 (323.7% higher than our fair-value estimate)
235% above our estimate, beyond the bull case
Fundamentals snapshot
Amazon.com, Inc.
AMZN · NMS · Consumer Cyclical · Internet Retail
Current price
$262.37
52-week range
$196.00 - $287.20
Market cap
$2.83T
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 33% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Risk Forward P/E (25.1x) is higher than trailing (21.1x) - earnings are expected to drop.
What this company does
Amazon.com, Inc.
While most people know Amazon for its online store and Prime subscriptions, the company makes most of its actual profit from its cloud computing division, Amazon Web Services (AWS). This part of the business rents out computing power and data storage to other companies, which generates high operating margins (the percentage of each sales dollar left over after paying for the day-to-day costs of running the business). This highly profitable division provides the cash to support the massive but less profitable retail side and fund new ventures, making the overall company very powerful.
How the company got here
Amazon was started by Jeff Bezos in his garage in 1994 as an online bookstore. At a time when the internet was just taking off, he saw an opportunity to create a massive online selection of books that a physical store never could. After surviving the dot-com bubble burst, the company expanded to sell almost everything you can think of, from electronics to groceries. Key turning points included launching Amazon Prime in 2005, which made fast, free shipping a customer expectation, and creating Amazon Web Services (AWS), which originally supported its own retail site but grew into a massive, profitable business on its own.
What it actually does
Most people know Amazon as a giant online store where you can buy everything from toilet paper to TVs, either directly from Amazon or from independent sellers. It also owns the grocery store Whole Foods and makes popular electronic devices like the Kindle e-reader and Echo smart speakers. Beyond physical products, Amazon is a major player in digital entertainment, offering streaming movies and TV shows through Prime Video and music through Amazon Music. A huge, but less visible, part of the company is Amazon Web Services (AWS), which provides the computing power for countless other websites and applications.
North America
This is Amazon's largest and original business segment, covering its retail operations in the United States, Canada, and Mexico. It includes sales of products Amazon buys and resells itself, as well as fees from third-party sellers who use the website as a marketplace (a platform for independent sellers to reach customers). This segment also includes revenue from subscriptions like Amazon Prime, which offers shipping, video, and music benefits. While it generates the most revenue (the total amount of money coming in), its profitability has historically been lower than the company's cloud computing arm.
International
This segment is essentially a mirror of the North America business, but for the rest of the world, including countries in Europe and Asia. It covers online retail sales, third-party seller fees, and Prime subscriptions in these international markets. Amazon has invested heavily to build its presence and logistics networks in these countries to compete with local players. Historically, this part of the business has been less profitable than the North America and AWS segments, sometimes even losing money as the company focuses on growth.
AWS (Amazon Web Services)
This is Amazon's cloud computing division and its most profitable business by a wide margin. Instead of buying and managing their own physical computer servers, companies and governments can rent computing power, storage, and database services from AWS. This allows startups and large enterprises alike to run their websites, apps, and other digital operations without the high upfront cost of their own equipment. While it brings in less total revenue than the retail business, AWS generates the majority of Amazon's overall profit.
What management is betting on now
Amazon's current major focus is on Artificial Intelligence (AI), investing billions to expand the capabilities of its AWS cloud platform for other companies to build AI tools. The company is also embedding AI into its own retail business to improve things like product recommendations and logistics (the process of managing how resources are acquired, stored, and transported). Another key priority is improving the profitability of its international retail business, which has often lagged behind its North American counterpart. Finally, the company continues to build out its advertising business, which allows sellers and brands to pay to have their products featured more prominently on the website and in video content.
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 $78.29 vs current price $262.37
Wall Street consensus is the average analyst price target: $331.72 (323.7% higher than our fair-value estimate).
Our most-likely fair value is $78.29 a share — about 70.2% below today's price of $262.37, 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 $120.79B Interest coverage 175.32x +399% vs AMZN Carries about 5.0x more debt cushion than AMZN.
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 $39.93B 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 33% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Forward P/E (25.1x) is higher than trailing (21.1x) - 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)
21.11x
Forward P/E
25.11x
P/B
5.13x
P/S
3.65x
EV/EBITDA
17.53x
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
0.0%
Payout ratio
0.0%
Last ex-div date
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