Amazon.com, Inc. (AMZN) Intrinsic Value & DCF Valuation
Specialty Retail · NASDAQ
Current Price
$235.50
Intrinsic Value
Outside reliable range
What Is Amazon.com, Inc.'s Intrinsic Value?
The base-case DCF model produces an intrinsic value estimate for Amazon.com, Inc. (AMZN) that falls outside its reliable range, so treat any single number with extra caution. This usually happens with unusual cash flow patterns or rapid recent changes in the business.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Amazon.com, Inc. (AMZN) Undervalued?
Because the model output for AMZN is outside the reliable range, no undervalued or overvalued read is given here. Use the calculator below to test your own assumptions instead.
COMPETITIVE MOAT
↑Vast E-commerce Network Effects
Amazon's marketplace benefits from a powerful network effect. More buyers attract more sellers, and more sellers offer greater selection, reinforcing its dominance.
↑AWS Cloud Infrastructure Dominance
Amazon Web Services (AWS) enjoys significant scale and customer lock-in. High switching costs and deep integration make it difficult for clients to move to competitors.
↑Logistics and Fulfillment Infrastructure
Amazon's extensive fulfillment network provides a substantial cost and speed advantage. This physical infrastructure is incredibly difficult and expensive for rivals to replicate.
INVESTMENT RISKS
↓AI Spending Uncertainty
While AI is a tailwind, doubts about the sustainability of massive AI spending could impact AWS growth. Competitors are also rapidly advancing their AI capabilities.
↓Satellite Internet Competition
New ventures, including Amazon's own satellite proposals, could fragment the connectivity market. This may create new competitive dynamics for its existing services.
↓Macroeconomic Headwinds
Economic downturns can reduce consumer discretionary spending and impact advertising revenue. This could slow growth across Amazon's diverse business segments.
Base case
AMZN base case valuation
Base case assumptions: 13.4% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the AMZN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Amazon.com, Inc. respond.
Open DCF Calculator for AMZNCompany Overview
Amazon.com, Inc. operates a vast global retail enterprise, distributing consumer goods and subscription services through both its extensive online platforms and a network of physical stores across North America and internationally. Its operations are structured into three primary segments: North America, International, and Amazon Web Services (AWS). The company's product offerings encompass both merchandise and content procured for direct resale, alongside items sold by third-party merchants on its platform. Furthermore, the company develops and markets its own range of electronic devices, such as Kindle e-readers, Fire tablets and TVs, Ring, Blink, eero, and Echo products. It also invests in the development and production of original media content. Amazon provides various programs designed to enable independent sellers to offer their products, and empowers authors, musicians, filmmakers, Twitch streamers, and app developers to publish and commercialize their content. Beyond this, it delivers a comprehensive suite of cloud computing solutions, including compute, storage, database, analytics, and machine learning services through AWS. The company also offers fulfillment services, advertising solutions, and digital content subscriptions. A key offering is Amazon Prime, its exclusive membership program. Amazon caters to a wide array of clientele, including individual consumers, third-party sellers, software developers, enterprise clients, content creators, and advertisers. Incorporated in 1994, Amazon.com, Inc. maintains its headquarters in Seattle, Washington.
Financial Metrics — AMZN Stock Valuation Data
Revenue/Share (TTM)
$72.12
FCF/Share (TTM)
$0.61
ROIC (TTM)
8.5%
ROE (TTM)
30.5%
P/FCF
387.0x
EV/EBITDA
10.5x
FCF Yield
0.26%
Debt/Equity
0.40x
Based on trailing twelve-month data, AMZN shows a free cash flow per share of $0.61 and a ROIC of 8.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 387.0x and FCF yield of 0.26% are important context metrics when evaluating AMZN's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of AMZN?
Amazon.com, Inc. currently generates $0.61 in free cash flow per share. At the current price of $235.50, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is AMZN undervalued?
AMZN trades at a P/FCF ratio of 387.0x with a free cash flow yield of 0.26%. A high P/FCF means investors are paying more per dollar of free cash flow, which usually reflects expectations of future growth. However, whether AMZN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value AMZN stock using DCF?
To perform a DCF valuation on Amazon.com, Inc.: (1) Start with the trailing free cash flow per share ($0.61) as the base, (2) project future FCF growth over 5-10 years based on Specialty Retail industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting AMZN's risk profile — with a debt-to-equity of 0.40x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to AMZN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Amazon.com, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Specialty Retail trends, then discounting those amounts to today's dollars. AMZN's ROIC of 8.5% shows moderate capital returns.
How does WACC affect AMZN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For AMZN, with a debt-to-equity ratio of 0.40x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See AMZN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value AMZN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.