# AMZN – DCF (2026-11-10)

Sample run by the Fair Value Coordinator. Method: 5-year explicit FCF forecast + Gordon growth terminal value, cross-checked with the implied terminal FCF multiple.

## Inputs
- Risk-free (10Y UST, 2026-11-10): 4.98%; ERP 5.0%; beta (5Y observed) 1.50 -> cost of equity 12.48%
- Cost of debt: 10Y + 1.0% spread (coordinator assumption), 21% tax -> 4.72% after tax; weights at market cap $2,930.00B / total debt $304.84B -> **WACC 11.75%**
- Normalized FCF = TTM operating cash flow ($168.30B) minus D&A as a maintenance-capex proxy ($79.35B) = $88.95B. Reported TTM FCF is $-46.89B and FY1 consensus FCF is $-38.90B because of AI/data-center growth capex, so an unadjusted FCF DCF would give a meaningless value. LOW CONFIDENCE.
- Growth path (FCF grows with revenue, constant FCF margin): years 2-3 at consensus 3Y revenue CAGR 15.9%, then fades linearly to terminal g by year 5
- Net cash (debt): $-190.62B; shares 10,817M (market cap / price; basic, not fully diluted)
- Scenarios: bear = 90% of year-1 FCF, half the growth rate, g 2.0%; base = as above, g 2.5%; bull = 110% of year-1 FCF, 1.25x growth, g 3.0%; all at base WACC

## Result (per share, vs close $270.87)
| Bear | Base | Bull |
|---|---|---|
| $69.99 | **$104.57** | $136.40 |

Base-case year 1-5 FCF ($B): 89.0, 103.1, 119.6, 133.3, 142.6. Terminal value is 69% of EV; implied terminal multiple 11.1x year-5 FCF (exit-multiple cross-check).

## Sensitivity (base case, $/share)
| WACC \ g | 2.0% | 2.5% | 3.0% |
|---|---|---|---|
| 10.75% | $113.57 | $120.11 | $127.50 |
| 11.75% | $99.47 | $104.57 | $110.25 |
| 12.75% | $88.02 | $92.08 | $96.56 |

Sources: see data/2026-11-10/AMZN.md