Amazon DCF

x Ticker AMZN Implied Share Price $140.02

Date 7/24/2022 Today's Share Price $122.42 Upside (Downside)

x Assumptions
Valuation Assumptions
WACC 7.8%
TGR 3.0%
1
x Income Statement 2017 2018 2019 2020 2021 2022
Revenue 177,866 232,887 280,522 386,064 469,822 525,188
% growth 30.9% 20.5% 37.6% 21.7% 11.8%

EBIT 4,106 12,421 14,541 22,899 24,879 18,689

% of sales 2.3% 5.3% 5.2% 5.9% 5.3% 3.6%

Taxes 770 1,196 2,373 2,863 4,791 1,197

% of EBIT 18.8% 9.6% 16.3% 12.5% 19.3% 6.4%

x Cash Flow Items 2017 2018 2019 2020 2021 2022

D&A 11,478 15,341 21,789 25,251 34,296 38,716
% of sales 6.5% 6.6% 7.8% 6.5% 7.3%

CapEx 11,955 13,427 16,861 40,140 61,053 61,051

% of sales 6.7% 5.8% 6.0% 10.4% 13.0%

Change in NWC (173) (1,043) (2,438) 13,481 (19,611)

% of sales (0.1%) (0.4%) (0.9%) 3.5% (4.2%)
1
x DCF 2017 2018 2019 2020 2021 2022
Revenue 177,866 232,887 280,522 386,064 469,822 525,188
% growth 30.9% 20.5% 37.6% 21.7% 11.8%

EBIT 4,106 12,421 14,541 22,899 24,879 18,689

% margin 2.3% 5.3% 5.2% 5.9% 5.3% 3.6%

Taxes 770 1,196 2,373 2,863 4,791 1,197

% of EBIT 18.8% 9.6% 16.3% 12.5% 19.3% 6.4%

EBIAT 17,492

D&A 11,478 15,341 21,789 25,251 34,296 38,716

% of sales 6.5% 6.6% 7.8% 6.5% 7.3% 7.4%
 CapEx 11,955 13,427 16,861 40,140 61,053 61,051
% of sales 6.7% 5.8% 6.0% 10.4% 13.0% 11.6%

Change in NWC (173) (1,043) (2,438) 13,481 (19,611) (2,716)

% of sales (0.1%) (0.4%) (0.9%) 3.5% (4.2%) (0.5%)

Unlevered FCF (2,126)

Present Value of FCF (1,972)

x Terminal Value
Present Value of Terminal Value
Enterprise Value
+ Cash
- Debt
Equity Value
Shares
x Share Price
14.4%

2 3 4 5
2023 2024 2025 2026
613,833 709,187 794,564 884,891
16.9% 15.5% 12.0% 11.4%

35,251 58,461 76,631 104,379

5.7% 8.2% 9.6% 11.8%

5,660 9,465 9,574 12,896

16.1% 16.2% 12.5% 12.4%

2023 2024 2025 2026

44,729 52,137 55,508 58,235

62,599 64,481 69,493 65,697

2 3 4 5
2023 2024 2025 2026
613,833 709,187 794,564 884,891
16.9% 15.5% 12.0% 11.4%

35,251 58,461 76,631 104,379

5.7% 8.2% 9.6% 11.8%

5,660 9,465 9,574 12,896

16.1% 16.2% 12.5% 12.4%

29,591 48,996 67,057 91,483

44,729 52,137 55,508 58,235

7.3% 7.4% 7.0% 6.6%
62,599 64,481 69,493 65,697
10.2% 9.1% 8.7% 7.4%

(3,174) (3,667) (4,109) (4,576) renevue*%average change NWC of sales

(0.5%) (0.5%) (0.5%) (0.5%)

14,895 40,319 57,180 88,597

12,812 32,166 42,310 60,801

1,893,024
1,299,115
1,445,232
66,385
47,556
1,464,061
10,456
$ 140.02
 WACC

x WACC
WACC = (% Equity x Cost of Equity) + (% Debt x Cost of Debt x (1 -Tax rate))
Cost of Equity = Risk Free Rate + (Beta x (Expected Market Return - Risk Free Rate))

Debt 47,556
% Debt 3.7%
Cost of Debt 2.0% interest rate
Tax Rate 21.0%

Equity Value 1,250,000 *research for current stock volume(Amazon)

% Equity 96%
Cost of Equity 8.1%
Risk Free Rate 2.8%
Beta 1.25
Market Risk Premium 4.2%

Debt + Equity 1,297,556

x WACC 7.82%
AMZN-US
Income Statement (M)
CY '13 CY '14 CY '15 CY '16 CY '17 CY '18 CY '19
Dec '13 Dec '14 Dec '15 Dec '16 Dec '17 Dec '18 Dec '19
Sales 74,452 88,988 107,006 135,987 177,866 232,887 280,522
Cost of Sales - - 71,651 88,260 111,890 139,082 165,387
Organic Growth (%) - - - - - 30.90 -
Constant Currency Revenue Growth (%) - - - - - - -
Gross Income 20,271 26,236 35,356 47,738 65,979 93,805 115,135
SG&A Expense - 25,925 32,952 9,027 12,790 16,814 22,273
Selling & Marketing Expense 3,046 4,207 5,062 6,910 9,558 13,061 18,311
General & Admin Expense 979 1,360 1,523 2,117 3,232 3,769 4,530
Research & Development 5,961 8,470 11,317 14,423 20,314 25,949 32,207
EBITDAR - - 8,514 12,303 15,585 27,761 36,329
EBITDA 5,246 6,553 10,805 15,440 20,007 33,476 43,245
EBITDA Non-GAAP 5,246 6,553 10,805 15,440 20,014 33,476 43,245
EBITDA GAAP 3,998 4,924 8,514 12,303 15,585 27,761 36,329
Depr. & Amort. 3,253 4,745 6,281 8,117 11,478 15,341 21,789
Operating Income 745 178 2,233 4,186 4,106 12,421 14,541
EBITA - - - - - - -
Operating Income - Non GAAP 1,993 1,808 4,523 7,328 8,536 18,135 21,605
Operating Income - GAAP 745 178 2,233 4,186 4,106 12,421 14,541
Interest Expense 141 210 460 484 849 1,418 1,600
Pretax Income 506 -112 1,568 3,892 3,807 11,261 13,975
Pretax Income - Non GAAP 1,754 1,518 3,859 7,026 8,236 16,976 21,033
Pretax Income - GAAP 506 -112 1,568 3,892 3,807 11,261 13,975
Tax Expense 162 167 951 1,425 770 1,196 2,373
Net Income 274 -241 596 2,371 2,244 10,073 11,588
Net Income - Non GAAP 1,228 1,218 2,879 5,442 6,463 15,599 18,467
Net Income - GAAP 274 -241 596 2,371 3,033 10,073 11,588
CY '20 CY '21 CY '22E CY '23E CY '24E CY '25E CY '26E CY '27E
Dec '20 Dec '21 Dec '22E Dec '23E Dec '24E Dec '25E Dec '26E Dec '27E
386,064 469,822 525,188 613,833 709,187 794,564 884,891 1,005,250
233,307 272,344 303,270 345,339 392,429 428,756 474,991 521,654
37.60 21.70 - - - - - -
- - 13.0 18.2 - - - -
153,013 198,018 222,333 267,914 319,146 344,907 393,591 456,910
130,023 172,838 205,864 240,980 62,045 - - -
22,009 32,551 35,889 40,992 45,039 50,049 55,244 61,172
6,668 8,823 10,248 11,572 12,774 13,457 14,651 15,198
37,677 49,407 61,322 71,126 78,921 78,372 86,060 93,556
57,092 71,994 75,118 96,787 114,563 - - -
57,284 71,994 74,333 94,969 120,461 151,162 190,601 240,175
57,284 71,994 74,333 95,044 122,044 151,162 190,601 240,175
48,150 59,175 56,145 76,900 101,060 104,110 116,233 137,777
25,251 34,296 38,716 44,729 52,137 55,508 58,235 64,625 11%
22,899 24,879 18,689 35,251 58,461 76,631 104,379 143,789
- 24,879 13,112 25,466 39,467 52,466 - -
32,033 37,698 36,200 54,606 78,621 98,932 135,236 181,685
22,899 24,879 18,689 35,251 57,638 73,633 104,379 143,789
1,647 1,809 1,992 2,147 1,992 1,933 1,979 2,029
24,178 38,151 10,410 35,362 57,769 75,782 103,732 143,130
33,277 50,970 20,383 44,899 65,978 82,933 92,005 112,866
24,178 38,151 10,436 34,917 58,061 72,751 103,732 143,130
2,863 4,791 1,197 5,660 9,465 9,574 12,896 15,596
21,331 33,364 9,078 28,240 45,799 62,937 91,207 128,011
30,449 45,643 27,090 43,322 62,173 67,335 90,083 116,225
21,331 33,364 9,078 28,240 45,799 62,937 91,207 128,011
Amazon.com, Inc. (AMZN)
$109.65

Amazon.com, Inc.
AMZN 023135106 2000019 NASDAQ Common stock
FactSet Fundamentals

GAAP/IFRS Cash Flow

Net cash provided by / used in operating activities
Net income / loss
Adjustments to reconcile net income / loss to net cash from / provided by operating activities
Depreciation of property and equipment, including internal-use software and website development, and other amortization, including
Stock-based compensation
Other operating expense / income, net
Other expense / income, net
Losses / gains on sales of marketable securities, net
Other expense / income, net excluding losses / gains on sales of marketable securities, net
Deferred income taxes
Excess tax benefits / charges from stock-based compensation
Cumulative effect of change in accounting principle
Changes in operating assets and liabilities
Inventories
Accounts receivable, net and other
Accounts payable
Accrued expenses and other
Unearned revenue
Additions to unearned revenue
Amortization of previously unearned revenue
Net cash provided by / used in investing activities
Purchases of property and equipment, including internal-use software and website development, net
Purchases of property and equipment, including internal-use software and website development
Proceeds from property and equipment incentives
Acquisitions, net of cash acquired, and other
Sales and maturities of marketable securities
Purchases of marketable securities
Net cash provided by / used in financing activities
Excess tax benefits / charges from stock-based compensation
Common stock repurchased
Proceeds from long-term debt and other
Proceeds from exercises of stock options
Proceeds from short-term debt, and other
Proceeds from long-term debt
 Repayments of long-term debt, capital lease, and finance lease obligations
Repayments of long-term debt and other
Repayments of short-term debt, and other
Repayments of long-term debt
Principal repayments of capital lease obligations
Principal repayments of finance lease obligations
Foreign-currency effect on cash and cash equivalents
Net increase / decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash, cash equivalents, and restricted cash, end of period
Supplemental cash flow information
Cash paid for interest on long-term debt
Cash paid for operating leases
Cash paid for interest on capital and finance lease obligations
Cash paid for interest on finance leases
Cash paid for interest on capital leases
Cash paid for interest on finance leases excluding cash paid for interest on capital leases
Cash paid for interest on financing obligations
Cash paid for income taxes, net of refunds
Assets acquired under operating leases
Fixed assets acquired under capital leases and other financing arrangements
Property and equipment acquired under capital leases
Property and equipment acquired under finance leases
Property and equipment acquired under build-to-suit leases
Conversion of debt
Growth
Net cash provided by / used in operating activities
Net income / loss
Adjustments to reconcile net income / loss to net cash from / provided by operating activities
Depreciation of property and equipment, including internal-use software and website development, and other amortization, including
Stock-based compensation
Other operating expense / income, net
Other expense / income, net
Losses / gains on sales of marketable securities, net
Other expense / income, net excluding losses / gains on sales of marketable securities, net
Deferred income taxes
Excess tax benefits / charges from stock-based compensation
Cumulative effect of change in accounting principle
Changes in operating assets and liabilities
Inventories
Accounts receivable, net and other
Accounts payable
Accrued expenses and other
 Unearned revenue
Additions to unearned revenue
Amortization of previously unearned revenue
Net cash provided by / used in investing activities
Purchases of property and equipment, including internal-use software and website development, net
Purchases of property and equipment, including internal-use software and website development
Proceeds from property and equipment incentives
Acquisitions, net of cash acquired, and other
Sales and maturities of marketable securities
Purchases of marketable securities
Net cash provided by / used in financing activities
Excess tax benefits / charges from stock-based compensation
Common stock repurchased
Proceeds from long-term debt and other
Proceeds from exercises of stock options
Proceeds from short-term debt, and other
Proceeds from long-term debt
Repayments of long-term debt, capital lease, and finance lease obligations
Repayments of long-term debt and other
Repayments of short-term debt, and other
Repayments of long-term debt
Principal repayments of capital lease obligations
Principal repayments of finance lease obligations
Foreign-currency effect on cash and cash equivalents
Net increase / decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash, cash equivalents, and restricted cash, end of period
Supplemental cash flow information
Cash paid for interest on long-term debt
Cash paid for operating leases
Cash paid for interest on capital and finance lease obligations
Cash paid for interest on finance leases
Cash paid for interest on capital leases
Cash paid for interest on finance leases excluding cash paid for interest on capital leases
Cash paid for interest on financing obligations
Cash paid for income taxes, net of refunds
Assets acquired under operating leases
Fixed assets acquired under capital leases and other financing arrangements
Property and equipment acquired under capital leases
Property and equipment acquired under finance leases
Property and equipment acquired under build-to-suit leases
Conversion of debt
All figures in millions of U.S. Dollar.
31 DEC '12 31 DEC '13 31 DEC '14 31 DEC '15 31 DEC '16 31 DEC '17 31 DEC '18 31 DEC '19

4,180 5,475 6,842 11,920 16,443 18,434 30,723 38,514

-39 274 -241 596 2,371 3,033 10,073 11,588
4,219 5,201 7,083 11,324 14,072 15,401 20,650 26,926
2,159 3,253 4,746 6,281 8,116 11,478 15,341 21,789
833 1,134 1,497 2,119 2,975 4,215 5,418 6,864
154 114 129 155 160 202 274 164
244 167 59 250 -20 -292 219 -249
-9 1 -3 5
253 166 62 245
-265 -156 -316 81 -246 -29 441 796
-429 -78 -6 -119 -829

1,523 767 974 2,557 3,916 -173 -1,043 -2,438

-999 -1,410 -1,193 -2,187 -1,426 -3,583 -1,314 -3,278
-861 -846 -1,039 -1,755 -3,367 -4,786 -4,615 -7,681
2,070 1,888 1,759 4,294 5,030 7,175 3,263 8,193
1,038 736 706 913 1,724 283 472 -1,383
275 399 741 1,292 1,955 738 1,151 1,711
1,796 2,691 4,433 7,401 11,931
-1,521 -2,292 -3,692 -6,109 -9,976
-3,595 -4,276 -5,065 -6,450 -9,876 -27,819 -12,369 -24,281
-3,785 -3,444 -4,893 -4,589 -6,737 -10,058 -11,323 -12,689
-11,955 -13,427 -16,861
1,897 2,104 4,172
-745 -312 -979 -795 -116 -13,972 -2,186 -2,461
4,237 2,306 3,349 3,025 4,733 9,988 8,240 22,681
-3,302 -2,826 -2,542 -4,091 -7,756 -13,777 -7,100 -31,812
2,259 -539 4,432 -3,763 -2,911 9,860 -7,686 -10,066
429 78 6 119 829
-960 0 0
3,378 394 6,359 353 621 16,231 768 2,273
 -588 -1,011 -1,933 -4,235 -4,361 -6,371 -8,454 -12,339
-513 -1,652 -354 -1,372 -668 -2,684

-1,285 -2,462 -3,860 -4,799 -7,449 -9,628

-135 -121 -147 -200 -337 -27
-29 -86 -310 -374 -212 713 -351 70
2,815 574 5,899 1,333 3,444 1,188 10,317 4,237
5,269 8,084 8,658 14,557 15,890 19,334 21,856 32,173
8,084 8,658 14,557 15,890 19,334 20,522 32,173 36,410

-31 -97 -91 -325 -290 -328 -854 -875

-3,361
-153 -206 -319 -575 -686
-647
0
-647
-39
-112 -169 -177 -273 -412 -957 -1,184 -881
-7,870
-802 -1,867 -4,008 -4,717 -5,704 -9,637 -10,615 -13,723
0
-13,723
-29 -877 -920 -544 -1,209 -3,541 -3,641 -1,362

7.1 31.0 25.0 74.2 37.9 12.1 66.7 25.4

-106.2 - -188.0 - 297.8 27.9 232.1 15.0
28.9 23.3 36.2 59.9 24.3 9.4 34.1 30.4
99.4 50.7 45.9 32.3 29.2 41.4 33.7 42.0
49.6 36.1 32.0 41.5 40.4 41.7 28.5 26.7
0.0 -26.0 13.2 20.2 3.2 26.3 35.6 -40.1
- -31.6 -64.7 323.7 -108.0 -1,360.0 - -213.7
-125.0 - -400.0 - - - - -
- -34.4 -62.7 295.2 - - - -
-294.9 41.1 -102.6 - -403.7 88.2 - 80.5
-591.9 81.8 92.3 -1,883.3 -596.6 - - -
- - - - - - - -
4.0 -49.6 27.0 162.5 53.1 -104.4 -502.9 -133.7
43.8 -41.1 15.4 -83.3 34.8 -151.3 63.3 -149.5
0.6 1.7 -22.8 -68.9 -91.9 -42.1 3.6 -66.4
-30.9 -8.8 -6.8 144.1 17.1 42.6 -54.5 151.1
-2.7 -29.1 -4.1 29.3 88.8 -83.6 66.8 -393.0
 539.5 45.1 85.7 74.4 51.3 -62.3 56.0 48.7
68.8 49.8 64.7 67.0 61.2 - - -
-49.0 -50.7 -61.1 -65.5 -63.3 - - -
-86.3 -18.9 -18.5 -27.3 -53.1 -181.7 55.5 -96.3
-109.0 9.0 -42.1 6.2 -46.8 -49.3 -12.6 -12.1
- - - - - - -12.3 -25.6
- - - - - - 10.9 98.3
-5.7 58.1 -213.8 18.8 85.4 -11,944.8 84.4 -12.6
-38.1 -45.6 45.2 -9.7 56.5 111.0 -17.5 175.3
47.2 14.4 10.0 -60.9 -89.6 -77.6 48.5 -348.1
- -123.9 - -184.9 22.6 - -178.0 -31.0
591.9 -81.8 -92.3 1,883.3 596.6 - - -
-246.6 - - - - - - -
1,808.5 -88.3 1,514.0 -94.4 75.9 2,513.7 -95.3 196.0
- - - - - - - -
- - - - - - - -
- - - - - - - -
-32.4 -71.9 -91.2 -119.1 -3.0 -46.1 -32.7 -46.0
- - - -222.0 78.6 -287.6 51.3 -301.8
- - - - - - - -
- - - - - - - -
- - - -91.6 -56.8 -24.3 -55.2 -29.3
- - - 10.4 -21.5 -36.1 -68.5 92.0
-3,000.0 -196.6 -260.5 -20.6 43.3 - -149.2 -
88.7 -79.6 927.7 -77.4 158.4 -65.5 768.4 -58.9
39.5 53.4 7.1 68.1 9.2 21.7 13.0 47.2
53.4 7.1 68.1 9.2 21.7 6.1 56.8 13.2

-121.4 -212.9 6.2 -257.1 10.8 -13.1 -160.4 -2.5

- - - - - - - -
- - - - -34.6 -54.9 -80.3 -19.3
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
-239.4 -50.9 -4.7 -54.2 -50.9 -132.3 -23.7 25.6
- - - - - - - -
-6.5 -132.8 -114.7 -17.7 -20.9 -69.0 -10.1 -29.3
- - - - - - - -
- - - - - - - -
88.8 -2,924.1 -4.9 40.9 -122.2 -192.9 -2.8 62.6
- - - - - - - -
31 DEC '20 31 DEC '21

66,064 46,327
21,331 33,364
44,733 12,963
25,251 34,296
9,208 12,757
-71 137
-2,582 -14,306

-554 -310

13,481 -19,611
-2,849 -9,487
-8,169 -18,163
17,480 3,602
5,754 2,123
1,265 2,314

-59,611 -58,154
-35,044 -55,396
-40,140 -61,053
5,096 5,657
-2,325 -1,985
50,237 59,384
-72,479 -60,157
-1,104 6,291

17,321 26,959

6,796 7,956
10,525 19,003
 -18,425 -20,668
-7,730 -9,343
-6,177 -7,753
-1,553 -1,590
-10,642 -11,163
-53 -162
618 -364
5,967 -5,900
36,410 42,377
42,377 36,477

-916 -1,098
-4,475 -6,722
-714 -674
-612 -521

-102 -153
-1,713 -3,688
-16,217 -25,369
-11,588 -7,061

-2,267 -5,616

71.5 -29.9
84.1 56.4
66.1 -71.0
15.9 35.8
34.1 38.5
-143.3 -
-936.9 -454.1
- -
- -
-169.6 44.0
- -
- -
- -245.5
13.1 -233.0
-6.4 -122.3
113.4 -79.4
- -63.1
 -26.1 82.9
- -
- -
-145.5 2.4
-176.2 -58.1
-138.1 -52.1
22.1 11.0
5.5 14.6
121.5 18.2
-127.8 17.0
89.0 -
- -
- -
662.0 55.6
- -
- 17.1
- 80.6
-49.3 -12.2
-188.0 -20.9
- -25.5
- -2.4
-10.5 -4.9
-96.3 -205.7
782.9 -158.9
40.8 -198.9
13.2 16.4
16.4 -13.9

-4.7 -19.9
-33.1 -50.2
-4.1 5.6
5.4 14.9
- -
- -
-161.5 -50.0
-94.4 -115.3
-106.1 -56.4
15.6 39.1
- -
- -
-66.4 -147.7
- -