Amazon Stock: Still Far From Its Fair Value After The YTD Bounce


  • In this article, I discuss the Amazon’s long-term prospects and also perform 2 types of company valuation analysis (DCF and relative).
  • Amazon has focused on cost management while increasing its market share in e-commerce. The Cloud segment has ~55% of the market share in IaaS and PaaS (combined).
  • Based on my quite conservative DCF models, AMZN is 25-32% undervalued today.
  • Relative valuation analysis is even more generous to the stock, giving it an upside potential of 24-57%, depending on which ratio you choose.
  • AMZN could begin to test its local lows if a massive sell-off begins. But already now, investors have some margin of safety.
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Intro & Thesis

Amazon (NASDAQ:AMZN) stock ended 2022 with a 50% correction (about the same percentage drop from its peak) – one of the worst years in the stock’s history if you do not count the drama of the 2000s: