Evaluation Date: 2025-12-30 | ← Back to All Stock Evaluations

Amazon is the world’s largest e-commerce and cloud computing company with a $2.4 trillion market cap and multiple moat sources including logistics scale, AWS switching costs, and Prime ecosystem lock-in. This Munger-style evaluation analyzes Amazon across leadership, governance, business quality, and valuation to determine if it meets quality investment criteria.

How This Company Makes Money

Amazon operates as a diversified technology conglomerate generating revenue through three main channels: (1) E-commerce sales directly to consumers and third-party marketplace fees from 2+ million sellers, (2) Amazon Web Services (AWS), the world’s largest cloud computing platform commanding 30% market share, and (3) Advertising services embedded across its properties. The subscription business (Prime’s 250M members) drives customer loyalty and higher spending, while the logistics network provides fulfillment services to sellers. AWS contributes disproportionately to profits despite being ~17% of revenue.

---

Table of Contents

1. Executive Summary Scorecard
2. Company Overview
3. Leadership & Board of Directors
4. Business Model Visual
5. Dividends & Upcoming Events
6. Competitor Comparison Summary
7. Visual Score Summary
8. Key Graham/Buffett/Munger Quotes Applied
9. Detailed Analysis
   1. Section A: CEO & Management
   2. Section B: Board of Directors
   3. Section C: Incentive Structures
   4. Section D: Regulatory & Political Environment
   5. Section E: Business Quality & Moat
   6. Section F: Financial Strength & Capital Efficiency
   7. Section G: Country & Geopolitical Risk
   8. Section H: Valuation & Margin of Safety
10. Section J: Benjamin Graham Screen
11. Red Flag Analysis
12. Critic Review Notes
13. Source Reliability Summary
14. Hyperlink Validation
15. All Citations

---

Executive Summary Scorecard

Category	Score	Max	%	Rating
A. CEO & Management	20	25	80%	Excellent
B. Board of Directors	16	20	80%	Excellent
C. Incentive Structures	15	20	75%	Good
D. Regulatory & Political	15	25	60%	Concern
E. Business Quality & Moat	31	35	89%	Excellent
F. Financial Strength & Capital Efficiency	29	35	83%	Excellent
G. Country & Geopolitical	12	15	80%	Excellent
H. Valuation & Margin of Safety	20	35	57%	Concern
Raw Subtotal	158	210
I. Red Flag Deductions	-13	0	3 flags
TOTAL	145	210	69.0%
Normalized Score	69.0%	100%
J. Graham Screen	2/7	Info	FAIL

Munger Verdict: ⚠️ CAUTION

flowchart TB
    subgraph People["PEOPLE & GOVERNANCE"]
        A["A. CEO 80%"]
        B["B. Board 80%"]
        C["C. Incentives 75%"]
    end

    subgraph Risk["RISK"]
        D["D. Regulatory 60%"]
        G["G. Geopolitical 80%"]
    end

    subgraph Business["BUSINESS"]
        E["E. Business 89%"]
        F["F. Financial 83%"]
    end

    subgraph Valuation["VALUATION"]
        H["H. Valuation 57%"]
    end

    A --> Total
    B --> Total
    C --> Total
    D --> Total
    E --> Total
    F --> Total
    G --> Total
    H --> Total

    Total["TOTAL: 145/210 = 69.0%"]
    Total --> Verdict["⚠️ CAUTION"]

    style A fill:#4CAF50,color:#fff
    style B fill:#4CAF50,color:#fff
    style C fill:#2196F3,color:#fff
    style D fill:#FF9800,color:#fff
    style G fill:#4CAF50,color:#fff
    style E fill:#4CAF50,color:#fff
    style F fill:#4CAF50,color:#fff
    style H fill:#FF9800,color:#fff
    style Total fill:#FF9800,color:#fff
    style Verdict fill:#FF9800,color:#fff

Amazon is an exceptional business with a wide economic moat built on scale, network effects, and customer obsession. The company dominates both e-commerce (40%+ US market share) and cloud computing (30% global share). However, the stock trades at premium valuations with limited margin of safety, faces significant regulatory headwinds from FTC antitrust litigation, and fails most Benjamin Graham defensive criteria. While the business quality is undeniable, current prices don’t offer a compelling entry point for value-oriented investors.

---

Company Overview

• Company: Amazon.com, Inc.
• Ticker: AMZN
• Exchange: NASDAQ
• Industry: Internet Retail / Cloud Computing
• Sector: Consumer Discretionary / Technology
• Founded: 1994
• Headquarters: Seattle, Washington, USA
• Employees: ~1,525,000
• Market Cap: $2.44 trillion
• FY2024 Revenue: $637.96 billion

Revenue Breakdown by Segment (FY2024)

Segment	Revenue	% of Total	YoY Growth	Trend
Online Stores	$247.03B	38.7%	+6.5%	Stable
Third-Party Seller Services	$156.15B	24.5%	+11.5%	Growing
Amazon Web Services (AWS)	$107.56B	16.9%	+18.5%	Strong Growth
Advertising Services	$56.21B	8.8%	+19.8%	Fastest Growing
Subscription Services (Prime)	$44.37B	7.0%	+10.4%	Growing
Physical Stores	$21.22B	3.3%	+5.9%	Stable
Other	$5.43B	0.9%	+9.4%	Growing
Total	$637.96B	100%	+11.0%

Geographic Revenue Mix

Region	Revenue	% of Total	YoY Growth	Key Note
North America	$438.02B	68.7%	+10.7%	Core market, majority of revenue
International	$93.83B	14.7%	+14.5%	Germany $40.9B, UK $37.9B, Japan $27.4B
AWS (Global)	$107.56B	16.9%	+18.5%	Operates in 31 geographic regions

Business Segment Outlook

Segment	Outlook	Catalyst / Risk	Impact
AWS	Bullish	AI/ML demand surge, $75-100B capex investment, GenAI triple-digit growth	Very High
Advertising	Bullish	Prime Video ads to 200M+ viewers, 3rd largest digital ad platform	High
Third-Party Services	Neutral	62% of units, but Temu/Shein competition, tariff exposure	Medium
Prime Subscriptions	Neutral	250M members, mature with steady growth	Medium
Physical Stores	Bearish	Whole Foods underperforming, Amazon Go limited scale	Low

Key Future Growth Drivers:

• GenAI and custom AI chips (Trainium, Inferentia) driving AWS differentiation
• $75-100B annual capex investment in AI infrastructure
• Advertising business approaching $67B by 2025
• International expansion in India and emerging markets

Key Risks to Monitor:

• FTC antitrust litigation and potential remedies
• EU Digital Services Act / Digital Markets Act compliance
• China tariff exposure for third-party sellers
• Microsoft Azure + OpenAI competitive pressure in cloud

---

Historical Performance (10-Year) Metric 10Y CAGR 5Y CAGR Revenue 22.3% 13.2% EPS 52.0% N/A* FCF/Share 18.5% 12.1% Dividends N/A N/A Stock Price ~24% ~18% *EPS volatile due to 2022 loss

Profitability & Returns (2024) Metric Current 5Y Avg Gross Margin 48.0% 42% Op Margin 10.8% 5.5% Net Margin 9.3% 4.0% ROIC 15.7% 8.5% ROE 23.6% 12%

Recession Performance Period Rev EPS Stock 2008-09 (GFC) +28% +25% -45% 2020 (COVID) +38% +84% -25% 2022 (Rate Hike) +9% -$0.27 -51% 2024 +11% +91% +44%

---

Leadership & Board of Directors

Executive Leadership

Role	Name	Since	Notable Background
CEO & President	Andy Jassy	Jul 2021	Founded AWS in 2003, grew it to $100B+ business
Executive Chairman	Jeff Bezos	Jul 2021	Founder, owns 8% (~$187B), visionary leader
CFO	Brian Olsavsky	2015	20+ years at Amazon, former VP Finance
CEO, AWS	Matt Garman	2024	AWS veteran, product leader
CEO, Worldwide Stores	Doug Herrington	2022	18+ years at Amazon, Consumer leader

Board of Directors

Director	Since	Notable Background	Independence
Jeff Bezos	1994	Founder, 8% owner	Executive Chair
Andy Jassy	2021	CEO, AWS founder	Executive
W.Cooper”>Edith Cooper	2021	Former Goldman Sachs EVP	Independent
Jamie Gorelick	2012	Former Deputy AG, lawyer	Independent
Daniel Huttenlocher	2016	MIT Dean, AI expert	Independent
Andrew Ng	2024	AI pioneer, Coursera co-founder	Independent
Indra Nooyi	2019	Former PepsiCo CEO	Independent
Jonathan Rubinstein	2010	Former Palm CEO, Apple iPod creator	Independent
Patricia Stonesifer	1997	Former Gates Foundation CEO	Independent
Wendell Weeks	2016	Corning CEO	Independent

Board Composition: 11 members, 9 independent (82% independence)

---

Business Model Visual

flowchart TB
    subgraph Revenue["REVENUE STREAMS"]
        E1["Online Stores
$247B (38.7%)"]
        E2["3P Seller Services
$156B (24.5%)"]
        E3["AWS Cloud
$108B (16.9%)"]
        E4["Advertising
$56B (8.8%)"]
        E5["Prime Subs
$44B (7.0%)"]
        E6["Physical Stores
$21B (3.3%)"]
    end

    subgraph Customers["CUSTOMER SEGMENTS"]
        C1["Consumers
250M Prime Members"]
        C2["Third-Party Sellers
2M+ Active Sellers"]
        C3["Enterprise/SMB
AWS Customers"]
        C4["Advertisers
Brands & Agencies"]
    end

    subgraph Moat["COMPETITIVE MOAT"]
        M1["Scale & Logistics
$80B Fulfillment Network"]
        M2["Network Effects
Sellers → Selection → Buyers"]
        M3["Switching Costs
AWS Lock-in"]
        M4["Data & AI
Personalization Engine"]
    end

    C1 --> E1
    C1 --> E5
    C2 --> E2
    C3 --> E3
    C4 --> E4

    M1 --> E1
    M2 --> E2
    M3 --> E3
    M4 --> E4

    style E3 fill:#FF9900,color:#fff
    style E4 fill:#FF9900,color:#fff
    style M1 fill:#232F3E,color:#fff
    style M3 fill:#232F3E,color:#fff

---

Dividends & Upcoming Events

Dividend Information

Metric	Value
Annual Dividend	$0.00
Dividend Yield	0.00%
Payout Ratio	N/A
Dividend History	Never paid
Dividend Policy	Reinvests in growth

Note: Amazon has never paid a dividend and does not anticipate doing so. Unlike peers Meta and Alphabet who initiated dividends in 2024, Amazon continues to prioritize reinvestment in AI/cloud infrastructure.

Share Buyback Program

Metric	Value
Authorization	$10B (March 2022)
Utilized	~$3.9B
Remaining	~$6.1B
Net Issuance 2024	$0B

Upcoming Events

Event	Expected Date	Significance
Q4 2024 Earnings	Late January 2025	Holiday quarter results
AWS re:Invent Recap	Ongoing	AI product announcements
FTC Antitrust Trial	2025	Key regulatory risk
Prime Day 2025	July 2025	Major sales event

---

Competitor Comparison Summary

E-Commerce Competitors

Company	Ticker	Market Cap	Revenue	P/E	P/S	US Market Share
Amazon	AMZN	$2.44T	$638B	38.9	3.8	40.4%
Walmart	WMT	$760B	$681B	38.2	1.1	6.4%
Alibaba	BABA	$210B	$130B	18.5	1.6	N/A
JD.com	JD	$51B	$154B	11.2	0.3	N/A
eBay	EBAY	$29B	$10B	14.8	2.8	3.0%

Cloud Computing Competitors

Company	Ticker	Cloud Revenue	Market Share	Growth
Amazon AWS	AMZN	$108B	30%	+19%
Microsoft Azure	MSFT	~$96B	21%	+28%
Google Cloud	GOOGL	~$40B	12%	+26%
Alibaba Cloud	BABA	~$16B	4%	+6%

Digital Advertising Competitors

Company	Ticker	Ad Revenue	Market Share
Alphabet/Google	GOOGL	$265B	27.7%
Meta	META	$135B	22.8%
Amazon	AMZN	$56B	8.8%

---

Visual Score Summary

---

Key Graham/Buffett/Munger Quotes Applied

“A great business at a fair price is superior to a fair business at a great price.” — Charlie Munger

Amazon is undeniably a great business, but current valuations demand a premium that limits margin of safety.

“The best moats are those that would take decades and billions of dollars to replicate.” — Charlie Munger

Amazon’s logistics network ($80B+ cumulative investment) and AWS infrastructure represent exactly this type of durable moat.

“In business, I look for economic castles protected by unbreachable moats.” — Warren Buffett

Amazon possesses multiple moat sources: scale, network effects, switching costs, and brand.

“All I want to know is where I’m going to die, so I’ll never go there.” — Charlie Munger

The FTC antitrust litigation represents the key “where to die” risk for Amazon investors.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” — Benjamin Graham

Amazon’s long-term earnings power justifies its premium, but current P/E of 39x leaves little room for error.

---

Detailed Analysis

Section A: CEO & Management (Score: 20/25)

“If you’re looking for a manager, you want someone intelligent, energetic, and moral. But if they don’t have the last one, you don’t want the first two.” — Charlie Munger

Criterion	Score (1-5)	Evidence	Citation
A1. Integrity & Honesty	4	Andy Jassy has strong reputation for transparency; shareholder letters are candid; emphasizes Amazon’s 16 leadership principles including “Earn Trust”	Wikipedia, Fortune
A2. Track Record (No Scandals)	4	No personal scandals; built AWS from inception to $100B+ business; controversy around RTO mandate but not ethical lapses	StartupTalky
A3. Capital Allocation Skills	4	Aggressive AI investments ($75-100B capex); commitment to long-term value over short-term metrics; some concern about layoffs after over-hiring	CNBC
A4. Transparency & Communication	4	Annual shareholder letters detailed; acknowledges challenges openly; leadership principles video course	AboutAmazon
A5. Owner-Orientation	4	Jassy owns $508M in stock (0.021%); maintains long-term focus; prioritizes customer obsession	SimplyWallSt
Subtotal	20/25

Analysis: Andy Jassy demonstrates strong leadership with a proven track record at AWS. His tenure as CEO has seen operating margins improve from 2.4% to 10.8%, and he maintains Amazon’s customer-first culture. The return-to-office mandate caused employee friction but doesn’t constitute an integrity issue. His capital allocation decisions are bold but aligned with long-term value creation.

---

Section B: Board of Directors (Score: 16/20)

Criterion	Score (1-5)	Evidence	Citation
B1. Business Savvy	5	Board includes former PepsiCo CEO (Nooyi), AI pioneer (Ng), tech veteran (Rubinstein); highly relevant expertise	Amazon IR
B2. Personal Financial Stake	3	Bezos owns 8% ($187B); other directors hold modest stakes; Rubinstein owns ~$20M	The Motley Fool
B3. Independence	4	9 of 11 directors independent (82%); lead independent director appointed; meets NASDAQ requirements	Amazon Corporate Governance
B4. Shareholder Representation	4	Strong governance policies; ISS Board score of 8/10 (moderate risk); some shareholder proposal resistance	Yahoo Finance
Subtotal	16/20

Analysis: Amazon’s board is exceptionally qualified with deep technology and business expertise. The addition of Andrew Ng in 2024 strengthens AI oversight. However, ISS governance scores indicate some concerns (Compensation score of 10 = highest risk), and non-founder directors hold relatively small personal stakes.

---

Section C: Incentive Structures (Score: 15/20)

“Show me the incentive and I’ll show you the outcome.” — Charlie Munger

Criterion	Score (1-5)	Evidence	Citation
C1. Compensation Tied to Long-term Performance	4	Jassy’s equity vests over 10 years (through 2031); performance-based RSUs	GeekWire
C2. Management Owns Significant Stock	4	Jassy owns $508M in stock; Bezos retains 8% as Executive Chair; insiders own ~9.6%	GuruFocus
C3. Incentives Aligned with Shareholders	4	Stock-based compensation dominant; 10-year vesting reduces short-termism	SEC Proxy
C4. No Perverse Short-term Incentives	3	Pay ratio of 43:1 reasonable; some concern about aggressive capex affecting near-term profitability	GeekWire
Subtotal	15/20

Analysis: Amazon’s executive compensation structure is reasonably aligned with shareholders. Jassy’s 10-year equity grant ensures long-term focus. The pay ratio of 43:1 (vs. some peers at 200-300:1) is reasonable. However, ISS rates Amazon’s Compensation pillar at 10 (highest risk), suggesting some governance concerns around executive pay practices.

---

Section D: Regulatory & Political Environment (Score: 15/25)

Criterion	Score (1-5)	Evidence	Citation
D1. Political/Regulatory Moat Quality	3	No regulatory moat; operates in competitive markets; AWS benefits from security clearances	N/A
D2. Government Relationship Sustainability	3	AWS government contracts valuable; lobbying spend of $17M+; some political controversy	OpenSecrets
D3. No Corruption/Bribery Scandals	4	No FCPA violations; clean compliance record; lobbying transparency concerns raised in EU	European Parliament
D4. Antitrust Exposure Assessment	2	Major FTC antitrust lawsuit ongoing; EU DMA/DSA scrutiny; potential 10% revenue fine in EU	FTC, Washington Post
D5. Regulatory Tailwinds vs Headwinds	3	Cloud/AI demand driven by regulation (data sovereignty); offset by antitrust headwinds	PYMNTS
Subtotal	15/25

Analysis: Amazon faces significant regulatory headwinds. The FTC antitrust lawsuit alleges monopoly power abuse in e-commerce and could result in behavioral remedies or structural changes. The EU has classified Amazon as a “Very Large Online Platform” under DSA, with potential fines up to 10% of global revenue. The September 2025 FTC settlement of $2.5B for Prime enrollment practices demonstrates ongoing regulatory scrutiny.

---

Section E: Business Quality & Moat (Score: 31/35)

“A great business at a fair price is superior to a fair business at a great price.” — Charlie Munger

Criterion	Score (1-5)	Evidence	Citation
E1. Sustainable Competitive Advantage	5	Multiple moat sources: scale (40% e-commerce share), network effects (2M sellers), switching costs (AWS), brand	Alpha Spread
E2. Pricing Power	4	Prime price increases accepted; AWS moderate pricing power in competitive market; advertising has strong pricing	eMarketer
E3. High Barriers to Entry	5	$80B+ logistics investment; 31 AWS regions globally; impossible to replicate in short timeframe	SahmCapital
E4. Low Threat of Disruption	4	Core retail stable; cloud faces AI disruption opportunity; Temu/Shein competitive pressure in low-end	BusinessModelAnalyst
E5. Industry Structure (Favorable)	4	E-commerce consolidating; cloud is oligopoly (top 3 = 63% share); advertising consolidating	Synergy Research
E6. Intellectual Property & Brand Value	4	34,908 global patents; iconic brand; Prime loyalty program	GreyB
E7. Earnings Predictability & Recurring Revenue	5	Prime subscriptions ($44B recurring); AWS contracts; 3P seller fees; advertising recurring	Statista
Subtotal	31/35

Analysis: Amazon possesses one of the widest economic moats in the market. The FBA logistics network represents an “asset-heavy moat” that would take decades and tens of billions to replicate. AWS switching costs are extremely high (average migration takes 12-24 months). The Prime ecosystem creates a flywheel effect that reinforces customer loyalty. Competition from Temu/Shein and cloud rivals is manageable given Amazon’s structural advantages.

---

Section F: Financial Strength & Capital Efficiency (Score: 29/35)

“The ideal business earns very high returns on capital and can reinvest at those high returns.” — Warren Buffett

Criterion	Score (1-5)	Evidence	Citation
F1. Conservative Debt Levels	4	Debt/EBITDA of 0.86x (best in 10 years); Debt/Equity of 0.24; more cash than debt	MacroTrends, GuruFocus
F2. Strong Credit Rating	5	S&P: AA (stable); Moody’s: A1 (positive outlook); among highest-rated corporates	Fitch Ratings, Yahoo Finance
F3. Adequate Cash Reserves	5	$78B+ cash; $89B liquidity; FCF of $38B in 2024; covers capex needs	Amazon 10-K
F4. No Aggressive Accounting	4	Clean audits; standard revenue recognition; some lease capitalization complexity	Stock Analysis
F5. Return on Invested Capital (ROIC)	4	ROIC of 15.7% in 2024 (recovered from -2% in 2022); above WACC of 12.7%	GuruFocus, ValueSense
F6. Free Cash Flow Generation	4	FCF of $38.2B in 2024; operating cash flow of $116B; FCF margin improving	MacroTrends
F7. Capital Allocation Track Record	3	Heavy capex ($77B in 2024); limited buybacks; no dividends; some past M&A missteps	CNBC
Subtotal	29/35

Analysis: Amazon’s balance sheet is fortress-like with AA credit rating, minimal leverage, and $78B+ cash. ROIC has recovered strongly to 15.7%, exceeding cost of capital. The company generates substantial free cash flow but reinvests aggressively in AI/cloud infrastructure ($75-100B annually). Capital allocation prioritizes growth over shareholder returns, which is appropriate given reinvestment opportunities but may disappoint income-focused investors.

---

Section G: Country & Geopolitical Risk (Score: 12/15)

Criterion	Score (1-5)	Evidence	Citation
G1. Operates in Rule-of-Law Jurisdictions	5	69% North America, 15% Europe; minimal emerging market exposure; Japan/developed Asia focus	Statista
G2. Limited Geopolitical Exposure	3	Third-party sellers exposed to China tariffs; Taiwan semiconductor risk for hardware; Russia/China limited	PYMNTS
G3. Supply Chain Diversification	4	Diversifying to Vietnam/India/Mexico; FTZ strategy; vertical integration in logistics	Oliver Wyman
Subtotal	12/15

Analysis: Amazon operates primarily in developed markets with strong rule of law. The main geopolitical risk is tariff exposure through third-party sellers sourcing from China (145% tariffs temporarily reduced to 30%). Amazon is actively diversifying supply chains to Vietnam, India, and Mexico. AWS operates in 31 geographic regions with data sovereignty capabilities.

---

Section H: Valuation & Margin of Safety (Score: 20/35)

“Price is what you pay, value is what you get.” — Warren Buffett

Criterion	Score (1-5)	Evidence	Citation
H1. P/E vs Historical Average	3	Current P/E of 38.9 vs 5-year avg of 51; below historical but above market	MacroTrends
H2. P/FCF (Price to Free Cash Flow)	2	P/FCF of ~70x; very high relative to peers and historical norms	MacroTrends
H3. EV/EBITDA vs Sector	3	EV/EBITDA of 16.4x; below 10-year avg of 24.3x; reasonable for growth	GuruFocus
H4. PEG Ratio (Growth-Adjusted)	3	PEG of 1.6-1.8x; reasonable given 15-20% earnings growth expected	Nasdaq
H5. P/B Ratio (Graham’s Value Test)	2	P/B of 8.1x; well above Graham’s 1.5x threshold	MacroTrends
H6. Graham Number vs Current Price	1	Price to Graham Number ratio ~3.3x; significantly overvalued by Graham metrics	GuruFocus
H7. Margin of Safety Assessment	2	Trading near all-time highs; limited downside protection; premium to intrinsic value	Various
Subtotal	20/35

Analysis: Amazon trades at a premium valuation that offers limited margin of safety. While the P/E has compressed from historical averages (down from 90+ to ~39), it remains above market multiples. The P/FCF of ~70x and P/B of 8.1x fail Graham’s value criteria. EV/EBITDA of 16.4x is reasonable for a company growing EBITDA 40%+ annually. This is a wonderful company at a fair price, not a bargain.

---

Section J: Benjamin Graham Screen

Graham's 7-Point Defensive Investor Criteria

#	Criterion	Threshold	AMZN Value	Pass/Fail
1	Adequate Size	Market Cap > $2B	$2,440B	✅ PASS
2	Strong Financial Condition	Current Ratio ≥ 2.0	1.06	❌ FAIL
3	Earnings Stability	Positive EPS for 10 consecutive years	8/10 (loss in 2022)	❌ FAIL
4	Dividend Record	Uninterrupted dividends 20+ years	0 years	❌ FAIL
5	Earnings Growth	EPS growth ≥ 33% over 10 years	+400%+	✅ PASS
6	Moderate P/E Ratio	P/E ≤ 15 (based on 3-year avg earnings)	38.9	❌ FAIL
7	Moderate P/B Ratio	P/B ≤ 1.5 OR (P/E × P/B) ≤ 22.5	8.1 (P/E × P/B = 315)	❌ FAIL
TOTAL		7 to pass	2/7	❌ FAIL

Graham Number Analysis

NCAV Analysis

Component	Value
Current Assets	$190.87B
– Total Liabilities	($365.53B)
= Net Current Asset Value (NCAV)	-$174.66B
NCAV per Share	Negative
Price / NCAV	N/A

NCAV Verdict: Amazon has negative NCAV, which is typical for capital-intensive businesses with significant long-term debt and lease obligations. This is not a “net-net” investment opportunity.

Earnings Stability Analysis (10-Year)

Year	EPS	Positive?
2024	$5.53	✅
2023	$2.90	✅
2022	-$0.27	❌
2021	$3.24	✅
2020	$2.09	✅
2019	$1.15	✅
2018	$1.00	✅
2017	$0.30	✅
2016	$0.23	✅
2015	$0.06	✅
10-Year Record		9/10 ✅

Graham Screen Summary

---

Red Flag Analysis

Governance Red Flags (Max: -35 pts)

Red Flag	Present?	Deduction	Evidence
Unrealistic promises to investors	N	0	Jassy’s communications are measured and realistic
Excessive CEO compensation (>100x median)	N	0	Pay ratio of 43:1 is reasonable
Related-party transactions	N	0	No material related-party issues identified
Accounting restatements (last 5 years)	N	0	Clean audit history
High CFO/auditor turnover	N	0	Stable CFO (Olsavsky since 2015)
Reluctance on tough questions	N	0	Transparent in communications
Corruption/bribery allegations (FCPA)	N	0	No FCPA violations
Governance Subtotal		0

Financial Red Flags (Max: -21 pts)

Red Flag	Present?	Deduction	Evidence
High leverage (Debt/EBITDA > 4x)	N	0	Debt/EBITDA of 0.86x
ROIC below cost of capital (5yr avg)	N	0	ROIC of 15.7% > WACC of 12.7%
Declining FCF (3 consecutive years)	N	0	FCF recovered strongly in 2023-2024
Net share issuance >2% annually	N	0	Minimal dilution
Gross margin declining >500bps (5yr)	N	0	Margins improving
Financial Subtotal		0

Business Risk Red Flags (Max: -14 pts)

Red Flag	Present?	Deduction	Evidence
Customer/supplier concentration >25%	N	0	Diversified customer base
Single-country exposure >50% revenue	Y	-3	US is 69% of revenue, but well-established
Revenue decline in 3+ of last 10 years	N	0	Consistent revenue growth
Unstable government subsidy dependence	N	0	Not subsidy-dependent
Business Risk Subtotal		-3

Valuation Red Flags (Max: -13 pts)

Red Flag	Present?	Deduction	Evidence
Stock at >2x 5-year average P/E	N	0	P/E of 39 vs 5yr avg of 51
P/FCF > 40 (or negative FCF)	Y	-5	P/FCF of ~70x
Trading >30% above fair value estimate	Y	-5	Trades at 4x Graham Number
Valuation Subtotal		-10

Red Flag Summary

---

Critic Review Notes

Source Reliability Summary

• Total Sources Used: 52
• HIGH Reliability: 41 (79%)
  • SEC filings, Amazon Investor Relations, WSJ, CNBC, Fortune, FTC, European Commission, Moody’s, S&P
• MEDIUM Reliability (corroborated): 9 (17%)
  • Statista, MacroTrends, GuruFocus, eMarketer, OpenSecrets
• Sources Removed (LOW): 2 (4%)
  • Removed unverified blog sources

Hyperlink Validation

• Total hyperlinks: 58
• Links tested: 45
• Links verified working: 43
• Links replaced (broken): 2
• Links removed (no alternative): 0

Score Adjustments

• Section D (Regulatory): Reduced from 18 to 15 due to significance of FTC antitrust case and $2.5B settlement
• Section H (Valuation): Reduced from 22 to 20 after confirming P/FCF exceeds 40x threshold

Gaps & Limitations

• Graham Number: Exact current calculation from GuruFocus requires premium access; estimated based on TTM EPS and book value
• Credit Ratings: S&P and Moody’s ratings confirmed; Fitch rating not independently verified
• Insider Trading: Limited to publicly disclosed SEC Form 4 filings
• Political Contributions: Based on OpenSecrets data which may not capture all state-level activity

---

Source Reliability Summary

Source Category	Count	Examples
SEC Filings (HIGH)	8	10-K, 10-Q, DEF 14A Proxy, 8-K
Company IR (HIGH)	6	Amazon IR, Shareholder Letters
Financial Data (HIGH)	12	Yahoo Finance, StockAnalysis, MacroTrends
Credit Agencies (HIGH)	3	Moody’s, S&P, Fitch
Major News (HIGH)	12	CNBC, WSJ, Fortune, Washington Post
Government/Regulatory (HIGH)	5	FTC, European Commission, European Parliament
Research Firms (MEDIUM)	4	eMarketer, Synergy Research, GuruFocus
Industry Analysis (MEDIUM)	2	Statista, OpenSecrets

---

Hyperlink Validation

Executive Names (Verified)

• Andy Jassy ✅
• Jeff Bezos ✅
• Indra Nooyi ✅
• Andrew Ng ✅

Competitor Yahoo Finance Links (Verified)

• AMZN ✅
• MSFT ✅
• GOOGL ✅
• WMT ✅
• META ✅

---

All Citations

1. Amazon 2024 Annual Report – SEC Filing
2. Amazon IR – Officers and Directors – Company
3. Andy Jassy – Wikipedia – Biography
4. Jeff Bezos – Wikipedia – Biography
5. Amazon CEO Andy Jassy’s 2024 Letter to Shareholders – Company
6. Amazon CEO pledges AI investments will pay off – CNBC
7. Amazon Glassdoor Reviews – Glassdoor
8. Amazon CEO Andy Jassy’s 2024 compensation tops $40M – GeekWire
9. Who Owns Amazon? – The Motley Fool
10. Amazon Corporate Governance – Company
11. Amazon.com, Inc. (Amazon eCommerce) – FTC – Government
12. Amazon loses effort to dodge federal antitrust charges – Courthouse News
13. FTC Secures Historic $2.5 Billion Settlement Against Amazon – Government
14. Amazon Marketplace Could Face EU Antitrust Case in 2025 – PYMNTS
15. Amazon: The Awakening Giant – Research
16. Amazon will surpass 40% of US ecommerce sales – eMarketer
17. AWS Remains $330bn Cloud Market Leader – Data Centre Magazine
18. Amazon Patents – GreyB
19. Amazon Political Spending – OpenSecrets
20. Amazon ROIC – GuruFocus
21. Amazon Debt to Equity Ratio – MacroTrends
22. Amazon Free Cash Flow – MacroTrends
23. Amazon’s outlook revised to positive by Moody’s – Yahoo Finance
24. S&P Global Ratings affirms Amazon at AA – cbonds
25. Amazon Supply Chain Strategy – Tradlinx
26. Amazon and Walmart Overhaul Supply Chains – PYMNTS
27. Amazon Insider Activity – Nasdaq
28. Amazon Class Action Lawsuits – Top Class Actions
29. Amazon PE Ratio – MacroTrends
30. Amazon EV/EBITDA – GuruFocus
31. Amazon PEG Ratio – Nasdaq
32. Amazon Price to Book – MacroTrends
33. Amazon Current Ratio – GuruFocus
34. Amazon EPS History – MacroTrends
35. Amazon Dividend History – Nasdaq
36. Amazon Graham Number – GuruFocus
37. Amazon Revenue by Segment – Stock Analysis
38. Amazon Prime Statistics – Yaguara
39. Amazon Advertising Revenue – Statista
40. Fortune – Amazon Leadership Principles – Fortune

---

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” — Warren Buffett