Amazon combines large-scale e-commerce operations with a high-margin cloud business in AWS that supplies the majority of cash generation. Forecasted free cash flows rise from $45.0B in 2025 to $72.0B in 2029, producing a total present value of $216.60B. A terminal value based on 3% perpetuity growth and a 10% discount rate yields $1,059.43B, discounted to $658.00B. The resulting enterprise value is $874.60B and equity value after $80.0B net debt is $794.60B. The implied intrinsic share value is $76.40, suggesting current market pricing leaves limited margin for error.
Amazon is the global leader in e-commerce and cloud services through its AWS division. While its retail operations run on thin margins, AWS delivers high profitability and remains the backbone of Amazon's cash generation. The company's scale, logistics network, Prime ecosystem, and digital advertising initiatives provide durable competitive advantages. With over $2.4 trillion in market cap, Amazon is one of the largest businesses in the world, balancing growth investment with expanding free cash flows.
2027: $58.0 → PV: $43.56 2028: $65.0 → PV: $44.37 2029: $72.0 → PV: $44.73 Total Present Value of FCFs: $216.60B Terminal Value Calculation Using the perpetuity growth model: TV = (72 × 1.03) / (0.10 - 0.03) = $1,059.43B Present Value of Terminal Value = $658.00B Enterprise Value = $216.60B + $658.00B = $874.60B Equity Value = $874.60B - $80.0B = $794.60B Intrinsic Value per Share: $76.40
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