Amazon: Glimpses of Shoeless Joe?
Damodaran provides a comprehensive valuation analysis of Amazon by decomposing it into three distinct business segments: Retail/Media (~$289B), AWS (~$139B), and Prime (~$73B), arriving at a per-share value of $1,019 versus the market price of $1,460. The article examines Amazon's deliberate low-margin, high-growth business model, its core competitive strengths (patience, experimentation, focus on free cash flow), and why the company remains overvalued despite its formidable market position and disruption capabilities.
Metrics in this report
11billions USD
Amazon capex, 2017
24.81%percent
Amazon AWS segment, 2017
9.09%percent
Amazon Retail/Media segment, 2017 (technology and content costs capitalized)
20%percent
target
AWS projected 5-year average margin
100millions
Amazon Prime membership, 2017
177billions USD
Amazon total revenues, 2017
42.88%percent
AWS revenue growth, 2017
15%percent
target
Amazon Retail/Media projected annual growth rate, next 5 years
25%percent
target
AWS projected annual growth rate, next 5 years
18.32%percent of revenues
Amazon total tech/content and net shipping costs, 2017