Highly Regarded

Is Amazon.com Inc. (AMZN) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Consumer Discretionary sector peers in our coverage

80% Discount TTM fundamentals · sector averages from covered peers

AMZN trades at 35.5× TTM earnings — a 80% discount to its Consumer Discretionary sector average of 178.7× in our coverage.

The Numbers

P/E (TTM)

35.5×

Sector avg: 178.7×

P/S (TTM)

3.8×

Sector avg: 7.8×

Market Cap

$2.73T

EPS (TTM): $7.17

Revenue (TTM)

$716.92B

Net income: $77.67B

Consumer Discretionary Peer Comparison

How AMZN's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
AMZN This page $254.76 35.5×
TSLA $362.44 335.6×
NKE $37.17 21.9×

Is the Discount Justified?

October 4, 2026

Amazon.com Inc. trades at a P/E of 35.1x, considerably below its Consumer Discretionary sector average of 132.7x. This valuation reflects a complex business model with varying profitability across segments. In Q2 2026, Amazon reported net sales of $200.6 billion, up 20% year-over-year, with operating income increasing 43% to $27.5 billion. Amazon Web Services (AWS) remains a key growth engine, with revenue accelerating 37% year-over-year, its fastest growth in 18 quarters, and a substantial backlog of $496 billion. However, significant capital expenditures for AI infrastructure, projected at around $220 billion for 2026, have pressured free cash flow. The lower P/E relative to the sector may be influenced by the lower margins of its vast retail operations and the heavy investment cycle.

Sources

Frequently Asked Questions

Is AMZN overvalued or undervalued?
On trailing-twelve-month earnings, AMZN trades at 35.5x versus a Consumer Discretionary sector average of 178.7x in our coverage — a 80.1% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing AMZN with its own Consumer Discretionary peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Consumer Discretionary names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Consumer Discretionary peers

NKE TSLA HD