Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
AMZN· Consumer Discretionary
Amazon
Amazon is a wonderful business priced like a fairy tale, trading at 32 times earnings while throwing off an owner earnings yield of barely a quarter of one percent.
Buffett fit
Partial fit
Owner
37
Durability
34
Management
53
Price
10
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I bought the whole company today I would be paying about 32 times last year's earnings for the privilege, and the cash I could actually take home, the yield, is 0.26 percent.
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The scale is real and the cloud franchise is hard to dislodge, but the durability score of 34 reflects how much of this business lives in fast moving, capital hungry markets where today's edge is tomorrow's table stakes.
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Management earns a middling 53 here. They reinvest aggressively, and the 21.9 percent earnings growth shows the reinvestment is not wasted, but at just 9.9 percent of net income tells me the reported profits are largely an accounting promise rather than money in hand.
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There is none worth the name. At a of 32 and an yield of 0.26 percent, you are paying full price for perfection and then some.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1 of 50.6 percent shows the high-return AWS and advertising businesses are doing real work underneath the thin retail layer.
- 2Earnings have compounded at a 21.9 percent rate, evidence that the heavy reinvestment is producing genuine growth.
- 3Interest coverage of 33.7 times means debt is no threat to this company; the balance sheet is sturdy.
- 4Net debt to EBITDA of just 0.63 leaves plenty of room to weather a downturn without distress.
Concerns
7- 1The price is the problem: a of 32 and an yield of just 0.26 percent mean you are paying for a decade of flawless execution before you see a dime.
- 2 is only 9.9 percent of reported net income, so the earnings the market is celebrating are mostly still sitting in concrete and silicon, not in shareholders' pockets.
- 3 of 9.6 percent is unremarkable for a company carrying this much investor enthusiasm.
- 4EV to of 37.8 confirms the expensiveness from a second angle, leaving no cushion if growth slows.
Price history
$262+57.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Amazon makes its money two ways that pull in opposite directions. The retail and logistics machine is enormous but thin, which keeps the consolidated at just 11.5 percent, while Amazon Web Services and advertising are the high-return engines that lift to 50.6 percent. The trouble is that almost all the cash this company earns goes right back into warehouses, servers, and chips, so reported earnings have grown at a 21.9 percent clip while came to less than ten cents on every dollar of net income.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Discretionary
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