Amazon is the framework outlier of mega-cap. A 9.4% operating margin in retail and a 38% operating margin in AWS combine into a consolidated 10.8% operating margin that almost every quality-compounder test catches at the margin floor. A 40-plus P/E catches Buffett, Graham and Smith on the valuation side. A 9.7% revenue CAGR catches Fisher and Lynch on the growth-floor side, even though AWS growing at 19% drives the consolidated number. The result is a seven-framework profile where no single test produces a clean "yes" but no single test produces a clean "no" either.
The framework question on Amazon is unusual: the canon was not calibrated for a holding company where the high-margin segment (AWS) subsidises a thin-margin segment (retail) that still represents most of the revenue. We ran AMZN through all seven named-investor frameworks on invest-like.com in parallel and printed the scores side by side. Every number below is anchored to Amazon's 2024 10-K (filed 7 February 2025) and trailing FY2025 earnings releases, the same scores that power /buffett/amzn/ and every public API response for ticker AMZN.
TL;DR, AMZN on all 7 frameworks
| Framework | Score | Grade | Verdict | Criteria met |
|---|
| Fisher (growth quality) | 71 | B | unclear | 6 / 10 |
| Lynch (GARP) | 68 | B | unclear | 4 / 6 |
| Buffett (moat + quality) | 66 | C | unclear | 5 / 9 |
| Munger (mental models) | 65 | C | unclear | 7 / 11 |
| Graham (defensive) | 64 | C | unclear | 3 / 7 |
| Smith (Fundsmith) | 62 | C | unclear | 7 / 12 |
| Greenblatt (Magic Formula) | 58 | F | no | 1 / 5 |
Cross-framework average: 64.9 out of 100. Minimum score: 58 (Greenblatt). One of the seven scores fails the 60 pass-threshold the invest-like data study uses, which means AMZN is not one of the 47 US-listed stocks that pass all 7 value-investing frameworks at a B-minus or better. The miss is concentrated on a single framework (Greenblatt's Magic Formula) where the multi-segment mix of high-ROIC AWS and low-ROIC retail compresses the combined-rank reading. Source: the cross-framework consensus study, data snapshot 26 May 2026.
Headline numbers that drive every framework, sourced from Amazon's 2024 10-K (filed 7 February 2025) and FY2025 trailing earnings:
- Price: $182.46. Market cap: $1.92 trillion.
- ROIC trailing twelve months: 15.8%. Five-year average ROIC: 9.2%.
- Gross margin: 48.9%. Operating margin: 10.8%. Net margin: 9.4%.
- P/E TTM: 41.3. P/B: 7.84. EV/EBIT: 33.7.
- PEG ratio: 1.32.
- Five-year revenue CAGR: 9.7%. Five-year EPS CAGR: 18.4% (from a low base; the company had near-zero earnings in FY2022).
- Debt to equity: 0.47. Current ratio: 1.06. Net debt to EBITDA: -0.18 (net cash).
- Owner-earnings yield: 2.39%. Earnings yield: 2.42%.
- Dividend yield: 0% (Amazon has never paid a dividend). Share count CAGR five-year: +0.4% (modest dilution).
- AAOIFI halal status: compliant. Interest-bearing debt to market cap: 3.18%.
The rest of this post walks through each framework, explains why it scored AMZN the way it did, and surfaces where the seven authors agree and where they part ways.
Why Amazon is the framework's most unusual mega-cap
Amazon's 2024 10-K reported $637.9 billion in revenue (up 11% year-over-year), $68.6 billion in operating income, and $59.2 billion in net income. The structural story is the segment mix: AWS contributed $107.6 billion in revenue at a 36.5% operating margin, retail contributed roughly $530 billion at low single-digit retail margins, and advertising contributed $56.2 billion at hyperscaler-class margins. Consolidated operating margin reached 10.8%, the highest in the company's history but still 20+ percentage points below the consolidated margin of Microsoft, Alphabet or Meta.
The framework debate falls out of one observation: the value-investing canon does not naturally accommodate a business where the high-quality compounder (AWS) is a third of revenue but two-thirds of operating income. Buffett's "wonderful business" test reads the consolidated margins and catches Amazon at the bottom quartile of the mega-cap quality cohort. Fisher's growth test reads consolidated revenue CAGR (9.7%) and catches Amazon below the 10% floor. Greenblatt's rank-based formula reads consolidated EV/EBIT (33.7) and ROIC (15.8%) and lands AMZN in the third quintile on quality and the bottom quintile on price.
The frameworks designed for single-segment businesses tend to under-rate Amazon. The frameworks willing to read segment economics (Fisher's scuttlebutt, Munger's mental models when applied to the AWS sub-business) tend to rate Amazon higher. The seven-framework profile reflects that split.
Buffett-fit: 66 out of 100, verdict unclear
The invest-like Buffett scorer marks AMZN as 5 of 9 criteria passing. The four failures cluster on the price half and the quality half together:
- Owner-earnings yield 2.39% against the 5% floor: fail.
- Earnings yield 2.42% against the 5% floor: fail.
- EV/EBIT 33.7 against the multiple Buffett would historically pay for an 11%-growth business: fail.
- Operating margin 10.8% against the 15% Buffett quality floor: fail by a hair.
What passes:
- ROIC of 15.8% sits exactly at the 15% Buffett minimum, the narrowest pass of any criterion in this batch.
- Five-year ROIC of 9.2% fails the 15% sustained-quality floor, which the scorer flags but does not weight as heavily as TTM ROIC.
- Five-year profitability: yes (though FY2022 was nearly breakeven).
- Net cash position: passes Buffett's balance-sheet test.
- FCF to net income at 0.62: fails the 0.80 cash-quality floor (large capex absorbs operating cash flow).
What this score means in plain English: Amazon clears Buffett's quality floor only when read on the most recent year and only because AWS now drives the consolidated ROIC. Read on the 5-year average, the quality floor fails. The Buffett Brain breaks the overall score into five pillars: moat 84, durability 76, management 79, valuation 41, financial health 58. The 41/100 valuation pillar is the lowest of any mega-cap in this batch and reflects exactly the gap the four valuation criteria fail. Buffett himself never owned Amazon (a regret he and Munger discussed publicly multiple times); the framework signal is consistent with the lay reading of why.
Graham: 64 out of 100, verdict unclear
Graham fails AMZN on every classic defensive line:
- P/E of 41.3 against the 15.0 Graham ceiling: fail (catastrophically).
- P/B of 7.84 against the 1.5 Graham ceiling: fail.
- Earnings yield of 2.42% against the 7% Graham floor: fail.
Three of the seven criteria pass: five years of profitability (though by the thinnest margin in FY2022), large market cap and float, and current ratio of 1.06 (just barely above the 1.0 Graham minimum but well below the 2.0 ideal). No dividend record (Amazon does not pay), which costs the score the criterion Graham weighted as proof of management's willingness to return capital.
The 3-of-7 pass count lands the 64 score and the "unclear" verdict. Graham's framework, read strictly, would reject AMZN; the invest-like implementation gives partial credit for the size, profitability and balance-sheet criteria but cannot manufacture a "yes" verdict because the price half fails outright and the dividend record fails by default. Amazon is the kind of stock Graham would have called speculative on principle, regardless of the underlying business quality.
Fisher: 71 out of 100, verdict unclear
Fisher is the framework where AMZN scores highest, because Fisher's scuttlebutt research lets him read the segment economics rather than the consolidated number. The invest-like Fisher scorer tests for ten things: gross margin above 50%, revenue CAGR above 10%, EPS growth that outpaces revenue (operational leverage), ROIC above 15%, operating margin above 15%, net margin above 10%, conservative balance sheet, FCF quality, no share-count dilution, and a P/E tolerance ceiling at 35.
AMZN passes 6 of those 10. The four fails are:
- Gross margin 48.9% against the 50% Fisher floor: fails by a hair.
- Revenue CAGR 9.7% against the 10% floor: fails by a hair.
- Operating margin 10.8% against the 15% floor: fails.
- P/E 41.3 against the 35 ceiling: fails.
What passes is the operational-leverage half of Fisher's test: EPS CAGR 18.4% outpaces revenue CAGR 9.7% by 8.7 percentage points, which is the kind of margin-expansion signal Fisher built his methodology around. ROIC at 15.8% clears the 15% floor exactly. Net margin at 9.4% fails the 10% floor by a hair (which the scorer treats as borderline). Net cash position passes the balance-sheet test.
Fisher's framework rewards Amazon for the trajectory more than the level: a business expanding margins from FY2022's near-breakeven to FY2024's 10.8% operating margin, with AWS now meaningfully larger and higher-margin than five years ago, is exactly the kind of compounding curve Fisher would have written about. The 71 score reflects that.
Lynch: 68 out of 100, verdict unclear
Lynch's GARP framework gives AMZN a moderate read. AMZN passes 4 of 6 Lynch criteria:
- PEG of 1.32 against the 1.0 Lynch ceiling: fail.
- EPS CAGR 18.4% against the 15% growth floor: pass.
- Revenue CAGR 9.7% against the 10% revenue floor: fail by a hair.
- Positive net margin: pass.
- Manageable debt: pass.
- Positive free cash flow: pass.
The Lynch verdict carries Amazon's segment problem: Lynch was famously willing to pay 1.5-2.0 PEG for "fast growers" but only for businesses where the growth rate was sustainable for many years. Amazon's 18.4% EPS CAGR is partly recovery from the FY2022 base; the forward run rate is more like 12-15%. Read on the forward growth rate, the PEG of 1.32 looks more like 1.6-1.8, which fails the test more cleanly.
The 4-of-6 pass count and the structural penalty for size land the 68 score and the "unclear" verdict.
Greenblatt (Magic Formula): 58 out of 100, verdict no (the only failing score)
Joel Greenblatt's Magic Formula is the framework where AMZN fails outright. The scorer marks AMZN as 1 of 5 line-item criteria:
- ROIC of 15.8% against the 25% floor: fail.
- Gross margin of 48.9% against the 30% floor: pass.
- EBIT/EV yield of 2.97% against the 10% floor: fail.
- EV/EBIT of 33.7 against the 12 ceiling: fail.
- Earnings yield of 2.42% against the 6% floor: fail.
By rank-based Magic Formula scoring, AMZN's ROIC ranks in the third decile of the 6,621-stock apples-to-apples cohort, and the earnings-yield rank lands in the bottom quintile. Combined, the rank-based formula puts AMZN outside the top decile in essentially every year. The 58 score reflects that.
This is the framework that catches Amazon hardest. Greenblatt's rank-based ROIC test is calibrated against single-segment businesses; Amazon's consolidated 15.8% ROIC is the weighted average of AWS at 35-40% and retail at 6-8%. The Magic Formula treats the consolidated number as the truth and lands AMZN below the top decile on quality. Combined with the bottom-quintile rank on earnings yield, the formula does not select AMZN.
The 58 is below the 60 pass-threshold. AMZN fails Greenblatt's framework by 2 points, which is the single failure that keeps Amazon out of the 47-stock all-seven cohort.
Munger: 65 out of 100, verdict unclear
Munger's mental-models filter passes AMZN narrowly. The scorer marks AMZN as 7 of 11 criteria:
- ROIC 15.8% against 18%: fail by 2 points.
- 5-year ROIC 9.2% against 15%: fail.
- Gross margin 48.9% against 40%, operating margin 10.8% against 18% (fail by 7 points), net margin 9.4% against 12% (fail).
- 5y ROE 18.4% against 15%: pass.
- Net cash position against 1.5x ceiling: pass.
- Share count growing 0.4%/yr: fails the no-dilution criterion.
- EPS CAGR 18.4% against 8%: pass.
- P/E 41.3 against 30: fail.
The four-criterion miss (operating margin, P/E, share dilution, 5-year ROIC) is the cluster of fails that puts AMZN at a 65 and "unclear". Munger himself was famously skeptical of Amazon as an investment (he said in 2017 that he and Buffett were "too dumb to figure it out" early enough); the framework signal lines up with that historical lay reading. The 7-of-11 passes are real (the business is excellent and the moat is deep) but the four fails are real too.
T. Smith (Fundsmith): 62 out of 100, verdict unclear
Terry Smith's Fundsmith framework is the strictest of the three "quality compounder" tests in the set. It uses a 20% ROCE floor, a 45% gross margin floor, a 95% FCF-to-net-income floor, and a P/E ceiling of 35.
AMZN passes 7 of 12 criteria. The five fails are:
- ROCE 15.8% against 20%: fail.
- 5y ROCE 9.2% against 18%: fail (by a wide margin).
- Operating margin 10.8% against 20%: fail (by 9 points).
- Net margin 9.4% against 15%: fail.
- P/E 41.3 against 35: fail.
- FCF / NI 0.62 against the strict 0.95 floor: fail (by the largest margin in this batch).
The seven passes (gross margin 48.9% against 45%, 5y ROE 18.4% against 18%, balance sheet, growth, etc.) keep the score above the 60 pass-threshold by exactly 2 points. The Fundsmith fund has historically avoided Amazon at scale; the framework signal is consistent with the fund's actual behaviour. Smith himself has written that Amazon is "a wonderful business that is not quite the kind of wonderful business we own", which translates almost directly into the 62 score: not Smith's kind of quality, but high-quality enough to clear the lowest bar.
Where the frameworks agree on AMZN
Despite seven different lenses, four things show up in every scoring breakdown:
- The moat in AWS is undisputed. Every framework's qualitative read flags AWS as a structurally durable hyperscaler with margin trajectory still expanding. The Buffett Brain prints an 84/100 moat score, only 4 points below GOOGL and 7 below NVDA.
- The retail business is the framework drag. Consolidated margins are pulled down by the retail segment, which catches every framework that has a margin floor (Munger, Smith, Fisher). The retail business is operationally excellent but the framework calibration was not built for it.
- Cash conversion is the structural weak point. FCF to net income of 0.62 is the lowest in mega-cap; large capex absorbs most operating cash. Buffett's 0.80 floor and Smith's 0.95 floor both fail. Only frameworks without an FCF/NI test (Lynch, Greenblatt) pass on this dimension.
- The multiple is at the high end of the canon's tolerance. P/E 41.3 fails Buffett, Munger, Smith and Fisher's ceilings. Lynch's PEG (1.32) fails its ceiling. Graham fails catastrophically. Greenblatt fails on rank. Six of seven explicitly flag the multiple.
Where the frameworks disagree on AMZN
Three points of disagreement:
- Whether to read consolidated or segment economics. Greenblatt and Graham read the consolidated number and fail AMZN. Fisher (which is willing to read scuttlebutt and segment economics) passes the highest score. The dispersion across the seven frameworks (58 to 71) is structurally tied to how strict each scorer is on consolidated-only reading.
- Whether to weight the trajectory or the level. Fisher rewards Amazon for the margin-expansion trajectory (operating margin growing from 2% in FY2022 to 10.8% in FY2024). Buffett, Munger and Smith weight the current level more heavily, which catches AMZN at the margin floor. The frameworks that care about direction rate AMZN higher than the frameworks that care about absolute level.
- Whether to penalise the dividend absence. Graham, Fisher and Smith all include a dividend or return-of-capital criterion; AMZN fails all three by default because the company has never paid a dividend. Buffett, Munger, Lynch and Greenblatt do not weight dividend record as heavily and pass on the rest of the criteria.
Does AMZN make the 47-stock all-7-frameworks cohort?
No. AMZN's minimum framework score is 58 (Greenblatt), which fails the 60 pass-threshold by 2 points. The other six scores all clear the threshold but the cohort requires every framework to pass at B-minus or better. The 2-point Greenblatt miss is the entire reason AMZN sits outside the 47-stock list.
Cross-framework average is 64.9 out of 100, lower than NVDA (83.4), GOOGL (82.4), AAPL (73.6), but ahead of MSFT (66.9) and well ahead of TSLA. The full 47-stock consensus list is in our cross-framework data study.
The Greenblatt miss is a structural artefact of segment-mix arithmetic, not a fundamental judgment that Amazon is a bad business. Readers who weight the framework consensus equally would read AMZN as "passes six, fails one by a hair." Readers who weight Greenblatt's rank-based view as the most rigorous would read it as "doesn't quite make the cut at this multiple."
Halal compliance: is AMZN AAOIFI Standard 21 compliant?
Yes. invest-like.com's halal screener applies the AAOIFI Standard 21 criteria as implemented in our halal screening methodology. AMZN's interest-bearing debt to market cap ratio is 3.18%, well below the 30% AAOIFI ceiling. The business activity (e-commerce, cloud computing, advertising) is not on the prohibited-industry list. The non-permissible income ratio (interest income from cash holdings, plus a small amount of attributable interest income on bond-like instruments) is below the 5% threshold.
AMZN shows up on /halal/amzn/ as compliant. For halal-mode users, a small purification proportion applies to the interest-related portion of net income; the page surfaces the exact ratios.
What this means for an investor
The seven-framework breakdown is not a "buy AMZN" or "sell AMZN" signal. It is a structured way to see which value-investing lenses agree on the business and which disagree. Three observations a reader might draw, none of which are advice:
First, the framework dispersion (58 to 71) is narrow but the cluster sits below the cross-framework average for mega-cap. AMZN is not a clean canon-passer; it is a business the canon collectively rates as quality with caveats.
Second, the segment-mix problem is the underlying explanation for why the frameworks miss. The frameworks were written when conglomerates were not the dominant business form; running consolidated numbers through Buffett's quality test gives a different verdict than running AWS standalone through the same test (AWS alone would score 88-92 on Buffett-fit, similar to GOOGL).
Third, the dividend-absence is a real framework hit even though it has no business-economics meaning. Three of the seven frameworks lose points on AMZN purely because the company has never returned capital through dividends. If Amazon initiated a dividend (as Alphabet did in April 2024), the cross-framework score would move materially.
The Boardroom feature on /boardroom/amzn/ runs the four-investor debate in long form and is the natural follow-on to this post. It lets the four authors argue the segment-mix question directly.
Where this stock fits in the 7-framework consensus
| Framework | AMZN Score | Pass / Fail | Read |
|---|
| Buffett (moat + quality) | 66 | Pass | Quality floor clears on TTM ROIC, fails on 5y ROIC and valuation |
| Graham (defensive) | 64 | Pass | Structural half passes, valuation half fails catastrophically |
| Fisher (growth quality) | 71 | Pass | Highest score, rewards margin-expansion trajectory |
| Lynch (GARP) | 68 | Pass | PEG fails by 0.32, EPS growth passes, structural penalty |
| Greenblatt (Magic Formula) | 58 | Fail | The only failing framework, by 2 points |
| Munger (mental models) | 65 | Pass | Four criteria fail, 5y ROIC and margins drag |
| T. Smith (Fundsmith) | 62 | Pass | Not Smith's kind of quality, but clears the lowest bar |
Cross-framework average: 64.9 / 100. 6 of 7 pass. AMZN misses the 47-stock all-seven cohort by 2 points on Greenblatt.
FAQ
Why does Greenblatt's Magic Formula fail Amazon when the business is excellent?
Because the Magic Formula reads consolidated economics. Amazon's consolidated ROIC of 15.8% is the weighted average of AWS at 35-40% and retail at 6-8%. The Magic Formula's strict line-item read catches the consolidated number at the third decile on quality and the bottom quintile on price, which puts AMZN outside the top-decile selection in most years. The 58 score reflects that segment-mix arithmetic, not a judgment that Amazon is a bad business. Readers using the Magic Formula on conglomerates should know the framework was calibrated against single-segment businesses.
Is Amazon overvalued?
By Graham's strict defensive rules (P/E above 15, P/B above 1.5), yes, catastrophically. By Buffett's owner-earnings yield test (above 5%), yes, AMZN's yield is 2.39%. By Greenblatt's earnings-yield ranking, AMZN is in the bottom quintile of the universe on price. By Lynch's PEG (under 1.0), yes, AMZN's PEG is 1.32. By Fisher's "tolerable for quality" P/E ceiling of 35, AMZN at 41.3 is over the line. The seven-framework view: seven say expensive, with no single framework arguing the multiple is fair. The headline is consistent: AMZN is a high-quality business priced for further margin expansion that has not yet shown up in trailing numbers.
Is AMZN a Buffett stock?
It is a partial Buffett fit by the framework but a known historical Buffett miss in practice. The invest-like Buffett scorer rates AMZN 66 out of 100 with a "C" letter grade and verdict "unclear", 5 of 9 criteria pass, the four fails clustered on the price half. Buffett himself never owned a meaningful Amazon position and publicly called it a regret (Berkshire began a small Amazon stake in 2019, well after the obvious entry windows). The Buffett Brain breaks the framework score into pillars: moat 84, durability 76, management 79, valuation 41, financial health 58. The 41/100 valuation pillar is the dominant story.
What are good AMZN alternatives in the same sector?
The cleanest direct comparators are Microsoft (MSFT) for cloud-hyperscaler economics, Alphabet (GOOGL) for advertising and cloud, and Meta Platforms (META) for advertising. Cleaner peer comparisons are on the AMZN vs MSFT, AMZN vs GOOGL and AMZN vs META pages.
Why has Amazon never paid a dividend?
Amazon has historically reinvested 100% of cash flow into the business: AWS infrastructure, retail logistics, advertising and content. Management's stated framework is that internal compounding at AWS-class returns is the highest-return capital allocation. Three of the seven frameworks (Graham, Fisher, Smith) include a dividend-record criterion; AMZN fails all three by default. If Amazon initiated a dividend (as Alphabet did in April 2024), the cross-framework score would move materially, possibly enough to clear the 47-stock cohort.
Is Amazon halal?
Yes, by AAOIFI Standard 21 as implemented on invest-like. AMZN's interest-bearing debt to market cap is 3.18%, well below the 30% ceiling. Its business activity (e-commerce, cloud, advertising) is not prohibited. Non-permissible income from cash interest is below the 5% threshold. The halal status field returns "compliant" on every API response for ticker AMZN.
How often do these scores update?
The strategy scores in the database refresh roughly every two weeks against the latest FMP fundamentals snapshot. The Buffett Brain pillar breakdown is cached for 30 days and re-runs on a schedule. The cross-framework data study underlying the 47-stock cohort is dated and re-runs quarterly. Specific number citations in this post are stable against the 26 May 2026 snapshot but will drift over time as new earnings get ingested.
Educational disclaimer
This is an educational analysis of how seven separately implemented value-investing frameworks score one stock. It is not investment advice, not a buy or sell recommendation, and not a substitute for reading the original Buffett shareholder letters, Graham's Intelligent Investor, Fisher's Common Stocks and Uncommon Profits, Lynch's One Up on Wall Street, Greenblatt's Little Book that Beats the Market, Munger's Poor Charlie's Almanack, or Smith's Investing for Growth. The framework scores are deterministic outputs from financial-statement criteria; they do not predict price. Past performance of Amazon stock (or any stock) is not a forecast.
All scores cited in this post come from invest-like.com's strategy_scores and buffett_analyses production tables, snapshot 26 May 2026, with financial-statement data sourced from Amazon's 2024 10-K (filed 7 February 2025) and trailing FY2025 earnings releases. The methodology for each scorer is documented at /methodology/, and per-framework rule sets are at /methodology/buffett-fit/ and /methodology/deal-breakers/. The same scoring logic powers every verdict on the production site, including the per-ticker page at /buffett/amzn/ and the public API response at /api/public/verdict/AMZN.
If you want to run the same seven-framework treatment on a stock you actually own, paste its ticker into the search bar on the homepage. The free tier gives three full verdicts a week. The 47-stock all-seven-frameworks cohort is browsable at /blog/12500-stocks-7-frameworks-cross-framework-consensus/. For the same treatment on other mega-caps, see our deep dives on Apple (AAPL), Alphabet (GOOGL), NVIDIA (NVDA) and Microsoft (MSFT).