Amazon DCF Intrinsic Value of $189.84 Trails $207.67 Price by 9.4%
Amazon’s earnings-based DCF intrinsic value stands at $189.84 against a $207.67 share price, implying a -9.39% margin of safety. Using trailing twelve-month free cash flow per share, its DCF estimate is $8.12, suggesting a -2457.51% margin of safety and significant overvaluation.
1. Earnings-Based Intrinsic Value
The DCF analysis based on EPS without NRI yields an intrinsic value of $189.84 per share. With the current market price at $207.67, this produces a -9.39% margin of safety, indicating the stock is trading slightly above its calculated fair value.
2. Free Cash Flow DCF Estimate
Using trailing twelve-month free cash flow per share, the traditional DCF model estimates intrinsic value at $8.12. This calculation results in a -2457.51% margin of safety, signaling a substantial overvaluation under cash flow assumptions.
3. Model Assumptions
The valuation applies a discount rate of 11% (5% risk-free rate plus a 6% equity risk premium) and uses an EPS without NRI base of $6.08. It assumes a 47.30% annual EPS growth for 10 years followed by a 4% growth rate over the subsequent terminal period.