As of August 15, 2025, Amazon.com Inc's estimated intrinsic value ranges from $17.46 to $343.22 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $343.22 | +48.6% |
| Discounted Cash Flow (5Y) | $253.46 | +9.7% |
| Dividend Discount Model (Multi-Stage) | $225.87 | -2.2% |
| Dividend Discount Model (Stable) | $147.95 | -35.9% |
| Earnings Power Value | $17.46 | -92.4% |
Is Amazon.com Inc (AMZN) undervalued or overvalued?
With the current market price at $230.98, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Amazon.com Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.7 | 0.85 |
| Cost of equity | 7.1% | 9.6% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 13.1% | 15.7% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 7.0% | 9.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $253 | $2,683,815M | 83.2% |
| 10-Year Growth | $343 | $3,636,658M | 69.7% |
| 5-Year EBITDA | $317 | $3,357,341M | 86.6% |
| 10-Year EBITDA | $384 | $4,072,351M | 73.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $14,310M |
| Discount Rate (WACC) | 9.4% - 7.0% |
| Enterprise Value | $151,886M - $204,820M |
| Net Debt | $(7,023)M |
| Equity Value | $158,909M - $211,843M |
| Outstanding Shares | 10,616M |
| Fair Value | $15 - $20 |
| Selected Fair Value | $17.46 |
| Metric | Value |
|---|---|
| Market Capitalization | $2452153M |
| Enterprise Value | $2445130M |
| Trailing P/E | 34.72 |
| Forward P/E | 30.07 |
| Trailing EV/EBITDA | 14.55 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $102.96 |
| Discounted Cash Flow (5Y) | 25% | $63.37 |
| Dividend Discount Model (Multi-Stage) | 20% | $45.17 |
| Dividend Discount Model (Stable) | 15% | $22.19 |
| Earnings Power Value | 10% | $1.75 |
| Weighted Average | 100% | $235.44 |
Based on our comprehensive valuation analysis, Amazon.com Inc's intrinsic value is $235.44, which is approximately 1.9% above the current market price of $230.98.
Key investment considerations:
Given these factors, we believe Amazon.com Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.