DCF Studio

    AMZN · NMS · Consumer Cyclical

    Amazon.com, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 85.45

    Market price

    USD 245.63

    Implied upside

    -65.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 13.2% of revenue against depreciation of 8.5%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 85.45-65.2%
    Exit multiple
    USD 219.91-10.5%
    Market price
    USD 245.63

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn56bn111bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 828.9bnUSD 950.0bnUSD 1074.4bnUSD 1198.8bnUSD 1319.5bnUSD 1432.4bnUSD 1533.3bnUSD 1618.0bnUSD 1683.0bnUSD 1725.0bn+8.5%
    EBITUSD 63.6bnUSD 72.9bnUSD 82.5bnUSD 92.0bnUSD 101.3bnUSD 109.9bnUSD 117.7bnUSD 124.2bnUSD 129.2bnUSD 132.4bn+8.5%
    NOPATUSD 63.6bnUSD 72.9bnUSD 82.5bnUSD 92.0bnUSD 101.3bnUSD 109.9bnUSD 117.7bnUSD 124.2bnUSD 129.2bnUSD 132.4bn+8.5%
    Add depreciation & amortisationUSD 70.6bnUSD 80.9bnUSD 91.5bnUSD 102.1bnUSD 112.4bnUSD 122.0bnUSD 130.6bnUSD 137.8bnUSD 143.3bnUSD 146.9bn+8.5%
    Less capital expenditureUSD -109.7bnUSD -122.1bnUSD -133.9bnUSD -144.8bnUSD -154.3bnUSD -161.9bnUSD -167.4bnUSD -170.4bnUSD -170.7bnUSD -168.3bn+4.9%
    Capex, % of revenue13.2%12.9%12.5%12.1%11.7%11.3%10.9%10.5%10.1%9.8%-
    Less increase in working capitalUSD 721.1mUSD 779.8mUSD 801.2mUSD 801.4mUSD 777.3mUSD 726.9mUSD 649.5mUSD 545.8mUSD 418.2mUSD 271.0m+10.3%
    Free cashflow to firmUSD 25.2bnUSD 32.5bnUSD 40.9bnUSD 50.1bnUSD 60.2bnUSD 70.7bnUSD 81.5bnUSD 92.2bnUSD 102.2bnUSD 111.3bn+17.9%
    Discount factor0.95230.86370.78330.71040.64430.58430.52990.48060.43580.3953-
    Present valueUSD 24.0bnUSD 28.1bnUSD 32.0bnUSD 35.6bnUSD 38.8bnUSD 41.3bnUSD 43.2bnUSD 44.3bnUSD 44.5bnUSD 44.0bn-
    Present Value Of The ForecastUSD 375.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.337Reported 1.503, pulled toward 1.0 (Blume)
    Cost of equity10.55%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 35.2x interest cover. Book interest / average debt was lower, at 1.6%.
    Market capitalisationUSD 2656.0bn94.6% of capital
    Total debtUSD 153.0bn5.4% of capital, book value as a proxy
    Tax rate0.0%Effective, capped at statutory
    WACC10.26%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 85.45

    61% of EV

    Forecast FCFF, final year
    USD 111.3bn
    Capex at depreciation, working capital in reinvestment
    USD 132.4bn
    Less reinvestment at g/ROIC (16.2% of NOPAT)
    USD -21.4bn
    Capitalised
    USD 111.0bn
    ROIC (reported)
    15.5%
    Terminal value, undiscounted
    USD 1465.6bn
    Terminal value, discounted
    USD 579.3bn
    Enterprise value
    USD 955.2bn
    Less net debt
    USD 30.0bn
    Equity value
    USD 925.2bn

    Exit at 18.4x EBITDA

    Value per shareUSD 219.91

    84% of EV

    Terminal value, undiscounted
    USD 5148.4bn
    Terminal value, discounted
    USD 2035.1bn
    Enterprise value
    USD 2410.9bn
    Less net debt
    USD 30.0bn
    Equity value
    USD 2381.0bn

    Spread between methods: 88%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.26%115.64118.25121.44125.41130.37
    9.26%97.8799.14100.72102.67105.09
    10.26%84.2984.7985.4586.3187.40
    11.26%73.6073.6573.7874.0174.36
    12.26%65.0064.7764.5864.4564.37

    Outlined: this model. Green text: above today's price of 245.63. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year11.7%9.2%22.0%
    EBIT margin11.2%7.7%19.3%
    Discount rate-10.3%5.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.