Amazon.com, Inc.
AMZN · E-commerce & Cloud
Runs online retail and third-party seller marketplaces, Amazon Web Services (cloud computing), advertising and Prime subscriptions.
Model built Sep 10, 2026 · latest annual filing FY2025 · figures in USD
Assumptions
Start from
Years 1-5
Average per year
Starting: 10.4%
Operating profit as % of revenue, average
Starting: 14.0%
Capex as % of revenue, average
Starting: 23.4%
The long run
Growth fades to this by year 10, then continues forever
Starting: 3.0%
Profit earned on each dollar reinvested after year 5. Sets how much capex growth needs
Starting: 17.2%
The yearly return you require for the risk
Starting: 11.6%
Value per share
10 years of cash flows plus a value for everything after, all discounted to today.
Starting model (base)
$83
63% of this value comes from after year 10.
-67%
Arithmetic only, not a recommendation.What the price implies: buying at $253 earns about 6.5% a year if these cash flows play out, compared with the 11.6% discount rate.
Revenue and free cash flow
Last 5 years reported (SEC filings), then 10 years projected: years 1-5 from the assumptions, years 6-10 fading to the long run.
Projected free cash flow = operating profit after tax + depreciation - capex - working capital. Reported free cash flow = operating cash flow - capex, so the two are close but not identical.
Where the starting numbers come from
The years 1-5 assumptions were set by AI using the company's SEC filings, its own guidance and judgment about what is one-off. The reasoning for each line is under the i next to it. They are a starting point to react to, not a view. Compare them with what actually happened:
| Assumption | Starting (yrs 1-5 avg) | Reported (5 years to FY2025) |
|---|---|---|
| Revenue growth | 10.4% | 13.2% a year |
| Operating margin | 14.0% | 7.2% average |
| Capex % revenue | 23.4% | 13.2% average |
- Years 6-10 are calculated, not guessed: growth slides from the year-5 rate (7.0%) down to long-term growth (3.0%); margin and depreciation stay at year-5 levels; capex moves from 18.0% of revenue to 17.2%, which is depreciation plus what it takes to keep growing.
- Return on new invested capital (RONIC) 17%: what the years 1-5 assumptions themselves imply (extra after-tax operating profit by year 5 divided by the extra investment made to get there), kept between the discount rate and 100%.
- Discount rate 11.6%: cost of equity = risk-free rate 4.97% (US 10-year Treasury) + beta 1.40 x equity risk premium 5.0% = 12.0%; blended with cost of debt 5.0% after tax at 5% debt weight.
- Historical figures: SEC EDGAR annual filings (10-K). Share count and net debt from the latest filing used for the model.