QS Research · Michael Burry's Scion Capital analyst template · 2006
AMAZON COM INC (AMZN)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -24% · upside +22%
The market is pricing AMZN at 15.7x TTM EV/EBITDA, cheap versus MSFT/GOOGL/EBAY, but that multiple sits on $183.72B of EBITDA that is not reaching equity: FY Sep 2026 capex of $215.19B exceeded $168.30B operating cash flow, leaving -$46.89B FCF. On the TTM to Sep 30, 2026 base, today's 15.7x gives ~$260/share (about 0% vs $259.30); 12x gives ~$197 (-24%) and 19x gives ~$316 (+22%), so the risk/reward is roughly 1:1 rather than a deep-value long. The operating catalysts are real—AWS grew 39% in Q3 2026 and Jassy projects >40% in 2027-2028—but they require capex to convert into cash before the equity has a margin of safety. I would watch, not buy or short, until either the price falls toward the 12x downside or free cash flow turns positive.
Key numbers
- Share price: $259.30
- Market cap: $2,803.85B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $797.46B
- EV / EBITDA (TTM): 15.7x
- P/E (FY Sep 2026): 20.8x
- Price / book: 4.57x
The 15 boxes
- ✓ 1. Long-form business notes
Amazon runs a single business organized into three reported segments — North America, International and AWS — monetized four ways: first-party retail, third-party seller fees (fixed fees, percentage of sales, per-unit activity fees, interest), AWS on-demand technology services, and advertising. Scale roughly doubled between the FY2020 and FY2025 10-Ks: revenue $386.06B in FY2020 to $716.92B in FY2025, operating income $22.90B to $79.97B, operating cash flow $66.06B to $139.51B. The character of the business changed more than the structure: advertising moved from a service line mentioned in passing (FY2020) to one of the named primary customer sets (FY2025), Prime's bundle added live sports, headcount rose to roughly 1,576,000, and capital intensity stepped up sharply — FY2025 capex of $131.82B against operating cash flow of $139.51B.
- ✓ 2. Competitive advantage
Amazon's filings show a large-scale, cash-generative business but not a stated durable moat: S25 calls the marketplace intensely competitive across many sectors, and S26 says AI and other technologies make entry and comparison shopping easier. The data show FY2025 revenue of $716.92B, operating income of $79.97B, operating cash flow of $139.51B and capex of $131.82B. Operating income fell to $12.25B in FY2022 before rising to $79.97B in FY2025; no provided source gives market share, gross margin, ROE/ROIC or TTM figures.
- ✓ 3. 10-Q takeaways
Q3 2026 sales rose 12% to $201.9B (13% ex-FX), with AWS up 39% and North America/International up 6%/5%; management said Prime Day timing cut reported growth by about 400 bps. Operating income rose to $28.1B and operating margin was 13.9%, a record, while net income fell to $20.7B mainly because Q3 2025 included $9.5B of Anthropic-related pre-tax gains. TTM operating cash flow rose to $168.3B, but TTM free cash flow was an outflow of $42.4B as capex surged; Q4 2026 guidance is $240-247B sales and $28.5-33.5B operating income.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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