AMAZON COM INC (AMZN): what the price requires
At today's price, AMAZON COM INC (AMZN) is priced for today's economics sustained for ~8.9 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/AMZN
Headline
| Field | Value |
|---|---|
| Ticker | AMZN |
| Company | AMAZON COM INC |
| Sector / Industry | Consumer Cyclical / Retail |
| Current price | $246.57/sh |
| Composition | Online stores 38% / Physical stores 3% / Third-party seller services 24% / Advertising services 10% / Subscription services 7% / AWS 18% / Other 1% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 6.2% |
| Operating margin today | 11.5% |
| Margin compression implied | -5.3pp |
| Must persist for | 8.9y |
| Multiple paid | 34x operating income |
The operating-margin requirement is derived from the framework's value band at year 8, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | -0.27σ |
| cohort percentile (of 210 peers) | 87 |
| sustained it ~8.9 years at this level | 17% |
| implied end-window share | 11% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.30x | 5 | expensive |
| Earnings | 3.73x | 3 | expensive |
| Relative | 1.30x | 5 | expensive |
| Growth | 1.11x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $202.92 | 1.22x | yes | FCF base $85.9B, growth 14% (input: historical growth), terminal g 4.0%, WACC 8.6%, 6yr projection |
| DCF Exit Multiple | Growth | $274.95 | 0.90x | yes | Exit EV/EBITDA: 15.9x / 17.9x / 19.9x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $186.00 | 1.33x | yes | P/E 26.14x (blended: sector 20x + trailing (TTM) 40x), scenarios: 21.4x / 26.1x / 30.8x (bear / base = sector held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $65.90 | 3.74x | yes | BV/sh $40.64, ROE (TTM) 15.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $82.92 | 2.97x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $221.34 | 1.11x | yes | Rev $742.8B, growth 14% (input: historical growth; tapered), Terminal P/S: 3.0x / 3.6x / 4.3x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $213.82 | 1.15x | yes | EPS $6.11, growth 35% (input: historical EPS growth), PEG=1.16 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $27.70 | 8.90x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $47.85B × (1−21%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $85.06 | 2.90x | yes | BV $40.64 + 5yr PV of (ROE (TTM) 15.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $74.74 | 3.30x | yes | √(22.5 × EPS $6.11 × BVPS $40.64) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $190.07 | 1.30x | yes | EBITDA $155.86B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $197.12 | 1.25x | yes | EPS $6.11 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $16.02 | 15.39x | yes | BV $40.64 × (ROIC 3.4% / WACC 8.6%) |
| P/Sales Sector | Relative | $102.46 | 2.41x | yes | Revenue $742.78B × sector P/S 1.5x |
| PEG Fair Value | Relative | $229.09 | 1.08x | yes | EPS $6.11 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $66.04 | 3.73x | yes | EPS $6.11 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $7.0b |
| Net debt / NOPAT (after-tax) | -0.11x (net cash) |
| Net debt / operating income (pre-tax) | -0.09x (net cash) |
| Interest coverage | 32.9x |
| Share count CAGR (dilution) | 1.7% |
| Burning cash | no |
Bullet Takeaways
- Amazon's profit center has quietly stopped being retail: AWS produced 57% of FY2025 operating income on 18% of revenue at a 35.4% segment margin, and advertising, the fastest-growing line at 22.1%, reached $68.6B of near-pure-margin revenue.
- The biggest specific risk is the capital bill: total property additions nearly tripled in two years, from $48.3B in 2023 to $142.4B in 2025 per the FY2025 10-K, and the March quarter's $44.2B of capex exceeded its $26.0B of operating cash flow, swinging free cash flow to negative $18.2B.
- The next read arrives July 30, 2026, when second-quarter results land against management's guide of $194B to $199B in net sales and $20B to $24B of operating income.
Bull Case
The market is paying Amazon for endurance: today's price embeds roughly nine more years of growth at the pace the company has already shown, an assumption none of the standard valuation lenses can reach on their own. What the fundamentals show is a company busy earning it. Operating income grew 29.6% year over year in the March quarter on 16.6% revenue growth, and the operating margin reached 13.14%, up from 11.43% a year earlier. The engine behind that is mix. AWS, which the 10-K describes as selling "compute, storage, database, analytics, and machine learning, and other services to developers and enterprises of all sizes", grew 19.7% in FY2025 and delivered 57% of operating income from 18% of revenue; the Q1 2026 release put AWS growth at 28%, its fastest pace in fifteen quarters, on $37.6B of quarterly revenue. Every point of mix shift toward AWS and advertising makes the whole company more profitable without a single extra package shipped.
Where the advertising line can go is visible in the disclosures of the companies it competes against. Meta's Family of Apps ran a 51.5% operating margin on $198.8B of 2025 revenue, and Google Services ran 40.7% on $342.7B. Amazon's $68.6B advertising business rides on shopping intent neither of them owns, placed at the exact moment a customer is deciding what to buy. It is growing 22.1% a year, faster than any other Amazon revenue line, and every incremental dollar carries software economics through a retail income statement. The third-party seller services line, $172.2B and 24% of the business mix, compounds the same way: Amazon collects fees on other people's inventory risk.
On top of the operating story sit three call options the market can watch mature. Amazon Leo, the satellite broadband constellation formerly called Project Kuiper, moved from prototype to enterprise beta in April 2026 with Verizon, AT&T, Vodafone, JetBlue, NBN Co, and NASA among the first customers, and Amazon has disclosed more than $10B invested in it. Zoox has carried over 500,000 riders since its Las Vegas launch, runs fully driverless in two cities where Alphabet's Waymo is the scaled incumbent it must out-execute, and plans Austin and Miami with paid rides beginning in 2026. And the Anthropic position sits apart from both: the 10-K notes that "an additional portion of our notes was converted to nonvoting preferred stock" after year-end, part of roughly $49B of equity stakes carried alongside, not inside, the operating businesses; Anthropic's AWS workloads flow through segment revenue separately from the stake itself. The core funds all of this without leverage: $86.8B of cash and equivalents at year-end per the 10-K, net cash of $7.0B against gross debt, and interest covered 33.7 times over.
Bear Case
Follow the cash. In 2025 management spent $142.4B on property and equipment, nearly triple 2023's $48.3B, with $96.5B of it deployed into AWS per the FY2025 10-K capex disclosure. In the March quarter capex ran $44.2B against $26.0B of operating cash flow, and free cash flow came in at negative $18.2B. None of this returns to holders through buybacks; the share count has grown about 1.7% a year over the past four years, so stock compensation quietly dilutes while the cash goes into datacenters, satellites, and robotaxi fleets. That is a spending program, not a capital-return story, and it is being run at the precise moment the price already assumes the growth the spending is meant to buy.
The assumption is the problem. Today's price requires roughly nine more years of the demonstrated growth path before settling to a 4% terminal pace, an endurance bet that sits near the 87th percentile of what comparable companies have historically sustained. Every family of valuation method lands below the price: asset-based lenses at roughly a third of it, earnings-power methods lower still, peer multiples about 30% below, and even the forward-growth methods, the friendliest frame available, about 20% below. If the endurance assumption fades toward what the peer-multiple methods already credit, the multiple compresses and the operating story does not have to deteriorate at all for the stock to. The company's own filing names the mechanism: "Some of our current and potential competitors have greater resources, longer histories, more customers". Microsoft's Intelligent Cloud segment ran a 42.0% operating margin on $106.3B of revenue in its June 2025 fiscal year against AWS at 35.4%, and Google Cloud grew 35.8% to $58.7B in 2025, faster than AWS. Meanwhile the International retail segment still earns just a 2.9% operating margin, a reminder of how thin the non-services core runs.
The two named builds carry real downside texture. Amazon Leo missed the FCC's July 2026 half-constellation milestone; the June 2026 waiver spared the license but stripped interim spectrum-priority status from every satellite not yet deployed, and the full 3,232-satellite constellation is still due by July 2029 with launch capacity the binding constraint. The accounting is unforgiving in its own way: the 10-K states "We currently expense satellite network launch services deposits upon launch", so the constellation burns through the income statement as it flies, against a scaled incumbent in Starlink. Zoox has given away every one of its half-million rides; Cruise shut down in 2024 and Argo AI in 2022, and Waymo scaled first, so the graveyard for this exact business model is well populated and no public pure-play LEO broadband comp exists to anchor Leo's value either. If both builds stall, the premium in the price leans entirely on core durability, and the floor underneath is modest: Leo's invested capital recovers cents on the dollar in a divestiture scenario, and the roughly $49B of equity stakes, about $4.50 a share, bounds the very bottom, not the bet.
Valuation
Amazon at $245.35 (July 10, 2026) decomposes cleanly. The demonstrated businesses, valued at the multiples their public peers carry, support about $228.90 a share once operating-lease obligations are netted: online stores at 38% of the business mix, third-party seller services at 24%, AWS at 18%, advertising at 10%, subscriptions at 7%. The remaining $16.45 a share, roughly $179B across 10.87B shares outstanding per the FY2025 10-K, is the premium the market pays for what comes next, carried across continued compounding in the core plus the two named builds, Amazon Leo and Zoox.
No family of valuation method reaches the price on its own. The forward-growth methods come closest, with the price about 20% above them; peer multiples sit about 30% below the price; earnings-power and asset-value lenses land at a third of it or less. That pattern is a durability premium: the price is betting the demonstrated growth persists for roughly nine more years, discounted at about a 10% cost of capital, before fading to a 4% terminal pace. The company clears the margin side of that bet with room to spare, earning an 11.5% trailing operating margin where the price needs only 5.9%; all of the tension is in how long the growth lasts.
The named builds fill in some of the premium at plausible scale. Carried at satellite-broadband economics, a 14x multiple on 20% mature operating margins, Amazon Leo at $41B of mature revenue a decade out contributes about $4.07 a share. Zoox at rideshare economics, 30x on 18% margins, contributes about $7.85 at the same scale and horizon. Together that is roughly $12 against the $16.45 premium; sooner maturity lifts the pair toward $19 a share, slower toward $7. The named bets under-explain the premium at central scale, and the remainder is the market crediting the core's own durability, chiefly AWS, which earned a 35.4% segment margin on $128.7B of FY2025 revenue per the 10-K segment note, and the $68.6B advertising line growing 22.1%. The balance sheet carries the program comfortably for now, $7.0B of net cash and interest covered 33.7 times, but the March quarter's negative $18.2B of free cash flow is what the buildout costs when satellite launches, AI datacenters, and robotaxi fleets all draw at once. The cash-flow statement, not the income statement, is where this bet shows first.
Catalysts
The next hard data point is the July 30, 2026 second-quarter report. Management guided net sales of $194B to $199B and operating income of $20B to $24B, with the guide assuming Prime Day lands in most large geographies inside the quarter. The single number the market will read first is AWS growth: the segment accelerated to 28% in Q1 2026, its fastest in fifteen quarters, and holding near that pace validates the reacceleration while a slip back toward the high teens would land on a price that already sits above every valuation family.
The two builds have dated milestones of their own. Amazon Leo targets commercial service in mid-2026, moving beyond the enterprise beta that went live in April with Verizon, AT&T, Vodafone, JetBlue, NBN Co, and NASA, and the FCC's June waiver leaves the full 3,232-satellite deployment due by July 2029. Zoox unveiled its redesigned robotaxi on June 24 ahead of Austin and Miami launches later this year, with paid rides expected to begin in 2026. On the investment book, the 10-K's subsequent-events note flags an additional Anthropic note conversion recorded in the first quarter of 2026, which moves more of the position into preferred stock and more of the mark into reported other income.
Peer Cohorts (Per Segment, With Filing Citations)
AWS (reported)
- MSFT (MICROSOFT CORPORATION)
- (no filing in the citation store)
- GOOGL (ALPHABET INC.)
- (no filing in the citation store)
- ORCL (Oracle Corp)
- (no filing in the citation store)
- IBM (INTERNATIONAL BUSINESS MACHINES CORP)
- (no filing in the citation store)
Project Kuiper / Zoox (speculative)
- MSFT (MICROSOFT CORPORATION)
- (no filing in the citation store)
- GOOGL (ALPHABET INC.)
- (no filing in the citation store)
- CHWY (CHEWY, INC.)
- (no filing in the citation store)
- CPNG (COUPANG, INC.)
- (no filing in the citation store)
- W (WAYFAIR INC.)
- (no filing in the citation store)
- RVLV (REVOLVE GROUP, INC.)
- (no filing in the citation store)
- GCT (GIGACLOUD TECHNOLOGY INC)
- (no filing in the citation store)
- CDW (CDW CORP)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release · Q1 2026 earnings coverage · Amazon FCC waiver filing, June 2026 · CNBC, June 24, 2026 · FCC order and trade coverage, June 2026 · Q1 2026 earnings release via Seeking Alpha · FCC order and GeekWire, June 2026 · CNBC, June 24, 2026; Fortune, December 2025