Is Amazon.com, Inc. (AMZN) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $266.93, Amazon.com, Inc. (AMZN) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $76.21 and $310.23 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Amazon.com, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 11.3%, with a long-run terminal growth rate of 2.5%. About 83% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — AMZN would need sustained revenue growth of more than 25%/yr to justify today's price, against about 12.0% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, AMZN's modeled DCF value ranges from about $68.78 to $118.29 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Amazon.com, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of AMZN's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind AMZN's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $716,924,000,000 | Amazon Q4 2025 earnings release, 8-K Ex-99.1 (accession 0001018724-26-000002, filed 2026-02-05); ties to Amazon FY2025 10-K (accession 0001018724-26-000004, filed 2026-02-06): Total net sales FY2025 $716,924M (+12.4% on FY2024 $637,959M; +12% ex-FX). Mix: North America $426,305M, International $161,894M, AWS $128,725M. UNCHANGED as the base — the DCF grows this by forecast.revenue_growth. CROSS-CHECK: H1 2026 net sales $382,125M, +18.2% on H1 2025 $323,369M (Q2 alone +20% to $200,606M, flattered by Prime Day moving from July into June — Amazon says Q3 2026 growth would be ~400bp higher ex-Prime-Day in both years). TTM to 2026-06-30 is $775,680M. |
| Base EBIT margin | 11.2% | Amazon Q4 2025 earnings release, 8-K Ex-99.1 (accession 0001018724-26-000002, filed 2026-02-05): GAAP operating income $79,975M / $716,924M = 11.16%. Left as reported, INCLUDING Q4 2025's three special charges ($1.1B Italy tax dispute + lawsuit settlement, $730M severance, $610M impairments, ~$2.44B together; ex-charges FY2025 would be ~11.5%). Operating income EXCLUDES the Anthropic/OpenAI fair-value gains, which sit in non-operating 'Other income' — they are valued separately in net_debt, so nothing is counted twice. CROSS-CHECK: H1 2026 operating margin 13.43% ($51,313M / $382,125M; Q1 13.1%, Q2 13.7%), TTM 12.1%. H1 2026 includes $599M of unrealized energy-derivative gains inside 'Technology and infrastructure' (10-Q Note 2), ~0.16pt of margin, non-cash and excluded from Q3 guidance. |
| Forecast revenue growth | 15% → 14% → 12% → 10% → 9% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model in this tracker. |
| Beta | 1.30 | Assumption — normalized estimate (anchor: Yahoo/yfinance 5Y-monthly beta 1.443, read 2026-10-03): Published 5Y-monthly beta is 1.443; my own regressions against the S&P 500 agree it is high and NOT a single-window artefact: 1.49 (60 months), 1.59 (36m), 1.80 (24m), 1.46-1.47 (2-3 years weekly). Normalized DOWN to 1.30 by the standard Blume adjustment (0.67 × 1.443 + 0.33 = 1.30), which corrects regression betas for their documented drift toward 1.0, and because the 5-year window carries the 2022 post-pandemic e-commerce unwind (the stock roughly halved that year) — a one-off de-rating rather than how a $2.7T, AWS-weighted business co-moves with the market through a cycle. Same normalization CAT uses. THIS IS GENEROUS: it LOWERS WACC and RAISES the value. Using the published 1.443 instead lifts WACC to ~12.0% and takes ~$6.35/share off ($80.17). Even so, the shorter windows say the market currently treats Amazon as MORE sensitive, not less — the AI-capex era has raised it. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. FLAG: this is CONSERVATIVE for Amazon specifically — the model hands over from 9% growth in 2030 straight to 2.5% forever, and AWS/advertising will very likely still be growing faster than the economy in 2031. That cliff is a structural feature of a five-year DCF, and it is one of the main reasons this model sits well below the market. 3.0% adds ~$4/share ($90.49); 2.0% takes ~$3.50 off. Must remain < WACC of ~11.3%. |
| Diluted shares | 10,903M | Amazon Q2 2026 earnings release, 8-K Ex-99.1 (accession 0001018724-26-000024, filed 2026-07-30): Q2 2026 weighted-average diluted shares 10,903M (H1 2026 10,889M; FY2025 10,827M). Used rather than the 10,783M outstanding at 2026-06-30 because that is how this model carries stock-comp dilution. The count is creeping UP ~1% a year: Amazon has $6.1B left on a 2022 buyback authorization and bought nothing back in H1 2025 or H1 2026. Shares + awards outstanding 11,027M. |
| Market price | $266.93 | Delayed quote · as of 2026-11-10 05:48 UTC |
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