u/rebel-capitalist ·
Reddit — r/ValueInvesting
· July 01, 2026 at 14:25
· ⬆ 18 pts
· 💬 7 comments
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AI Summary
Summary
The author argues AMZN is extremely undervalued based on a conservative DCF using 15% growth and a terminal P/OCF of 19x, yielding 25%+ upside.
Supporting points: current valuation multiples (P/E 28.5x, P/OCF 17.4x) are ~29% below 5-year averages; revenue, net income, and EPS are growing strongly; insider buying has been significant.
Quality assessment: Well-researched DD with explicit DCF assumptions and comparative valuation data; the post is data-driven and coherent.
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I ran a conservative DCF on AMZN and the results speak for themselves.
AMZN is currently trading at 28.5× earnings and 17.4× operating cash flow both 29% below their 5-year averages of 52.1× and 21.2× respectively. The market seems to be underpricing the business despite revenue growing at +14.2% YoY (TTM). Net income growth of +37.7% and EPS growth of +36.7% are both outpacing revenue and margins are expanding.
It's also trading cheaper than its mega-cap peers on a historical basis. You can see the comparison here: [https://stocknest.app/?tab=compare&tickers=GOOGL,META,AMZN,MSFT&metrics=pocf&period=10](https://stocknest.app/?tab=compare&tickers=GOOGL,META,AMZN,MSFT&metrics=pocf&period=10)
For the DCF, the historical 4Y CAGR comes in at 31.73% but I used just 15% growth and a terminal P/OCF of 19× (vs. the 5Y median of 21.2×). Even with those conservative assumptions, AMZN still comes out undervalued by 25%+.
DCF model: [https://stocknest.app/?tab=dcf&tickers=AMZN&dcf\_metric=ocf&dcf\_growth=15&dcf\_terminal=19](https://stocknest.app/?tab=dcf&tickers=AMZN&dcf_metric=ocf&dcf_growth=15&dcf_terminal=19)
Analysts' price targets over the past 12 months average $307, which is 30% above the current price matching exactly the DCF conservative range. Additionally, the last two months have seen significant insider buying activity
AMZN trades at 28.5x P/E and 17.4x P/OCF, both ~29% below 5-year averages, while revenue grows 14.2% YoY and EPS grows 36.7% YoY. Conservative DCF (15% growth, terminal 19x P/OCF) implies 25%+ undervaluation; analysts’ average PT of $307 matches this upside; insider buying reinforces conviction. The market is mispricing AMZN’s strong fundamentals and margin expansion, offering a compelling long entry. Macroeconomic slowdown could compress growth; AWS competition or regulatory headwinds; failure to sustain margin expansion.
This Reddit post, published July 01, 2026,
features u/rebel-capitalist
discussing AMZN.
1 trade idea extracted by AI with direction and confidence scoring.