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 36.2× TTM earnings — a 80% discount to its Consumer Discretionary sector average of 181.8× in our coverage.

The Numbers

P/E (TTM)

36.2×

Sector avg: 181.8×

P/S (TTM)

3.9×

Sector avg: 7.9×

Market Cap

$2.79T

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 $259.85 36.2×
TSLA $367.81 340.6×
NKE $39.07 23.0×

Is the Discount Justified?

August 30, 2026

Amazon's P/E of 37.2x, substantially below the sector average of 127.8x, reflects a nuanced valuation. The company delivered strong Q2 2026 results, with net sales up 20% year-over-year and operating income increasing by 43%. Amazon Web Services (AWS) notably grew 37%, its fastest in 18 quarters, with a significant backlog. However, substantial investments in AI are driving increased capital expenditure, impacting free cash flow. Furthermore, a considerable portion of net income was attributed to non-operating gains from investments. This blend of strong core business growth and heavy reinvestment, coupled with non-operating income, likely influences its current valuation.

Sources

Frequently Asked Questions

Is AMZN overvalued or undervalued?
On trailing-twelve-month earnings, AMZN trades at 36.2x versus a Consumer Discretionary sector average of 181.8x 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