Amazon.com sells a range of products and services through its websites, including merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. The company also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Echo and Fire phones. The company was founded in 1994 and is based in Seattle, Washington.
AMZN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Amazon Com Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Amazon Com Inc ranked in the 66th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 184.17% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for AMZN, they are:
The company has produced more trailing twelve month cash flow than 97.01% of its sector Technology.
The business' balance sheet suggests that 6% of the company's capital is sourced from debt; this is greater than merely 15.11% of the free cash flow producing stocks we're observing.
AMZN's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 52.52% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as AMZN, try UPLD, NOW, KN, SCKT, and MLNX.