Amazon.com, Inc. (AMZN) Fair Value & PE Analysis
Specialty Retail · NASDAQ
Current Price
$258.31
PE Ratio (TTM)
20.5x
Intrinsic Value
$389.57
+33.7% margin of safety
What Is Amazon.com, Inc.'s Fair Value?
As of 2026-10-08, applying a 20.6x earnings multiple to Amazon.com, Inc.'s (AMZN) earnings per share of $12.57 yields a fair value estimate of $389.57 per share, versus a market price of $258.31.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $316.48 to $472.88. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · AMZN intrinsic value (DCF view)
Is Amazon.com, Inc. (AMZN) Overvalued?
At $258.31, AMZN trades below its PE-based fair value estimate by a wide margin. By this model the stock looks cheap relative to its earnings power, but check whether earnings are sustainable before reading too much into it.
COMPETITIVE MOAT
↑Vast E-commerce Scale and Network Effects
Amazon's immense customer base and seller network create powerful network effects. More buyers attract more sellers, and vice versa, reinforcing its dominant market position.
↑AWS Cloud Computing Dominance
Amazon Web Services benefits from significant scale, deep technical expertise, and high switching costs for enterprise clients. This provides a substantial and growing revenue stream.
↑Logistics and Fulfillment Infrastructure
Amazon's extensive network of warehouses and delivery capabilities offers unparalleled speed and efficiency. This creates a high barrier to entry for competitors in e-commerce.
INVESTMENT RISKS
↓AI Buildout Capital Expenditure
Significant investment in AI infrastructure, while promising growth, also carries substantial capital expenditure risks. This could strain margins if AI adoption doesn't meet expectations.
↓Economic Sensitivity and Consumer Spending
Amazon's retail business is highly sensitive to economic downturns and consumer spending habits. Rising interest rates and economic uncertainty could impact sales volumes.
↓Intensifying E-commerce Competition
While Amazon has scale, other retailers are improving their online offerings and logistics. This could lead to market share erosion in specific product categories.
Base case
AMZN base case PE valuation
Intrinsic Value
$389.57
Margin of safety
+33.7%
Expected annual return
+8.6%
Base case assumptions: 14.7% annual earnings growth, 20.55x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-08.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the AMZN PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Amazon.com, Inc. respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
20.5x
PEG Ratio
0.23
Earnings Yield
4.87%
ROE (TTM)
30.5%
Revenue/Share (TTM)
$72.12
Debt/Equity
0.40x
Frequently Asked Questions
What is the PE ratio of AMZN?
The trailing twelve-month PE ratio of AMZN reflects how much investors pay per dollar of Amazon.com, Inc.'s earnings. This metric is most useful when compared to Specialty Retail peers and the company's own historical range.
Is AMZN overvalued based on PE ratio?
AMZN's PE of 20.5x combined with a PEG ratio of 0.23 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Specialty Retail, a DCF analysis may be more appropriate.
How do I value AMZN stock using PE ratio?
To value Amazon.com, Inc. using PE: (1) Compare the current PE (20.5x) against the Specialty Retail median to assess relative pricing, (2) check the PEG ratio (0.23) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of AMZN?
AMZN's PEG ratio is 0.23, calculated by dividing the PE ratio (20.5x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for AMZN stock valuation?
PE ratio gives a quick relative read — how AMZN is priced versus Specialty Retail peers. DCF provides an absolute value based on projected free cash flows. For AMZN, with a strong ROE of 30.5%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See AMZN DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value AMZN with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-08. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.