Is amazon undervalued or overvalued right now?

Amazon (AMZN) appears to be currently valued at a premium compared to its intrinsic value and some of its peers, though it trades at a discount to its own historical valuation metrics. Here's a detailed analysis:

1. Intrinsic Value vs. Market Price: According to the analysis in source 2, Amazon's intrinsic value is significantly less than its current market price. The intrinsic value of AMZN stock is estimated to be $125.12 USD, which is 35% less than its price of $193.61 USD. The DCF value of AMZN stock is $107.76 USD, which is 44% less than its price. This suggests that the stock may be overvalued at the current market price.

2. Valuation Metrics:
   • The Price-to-Earnings (P/E) ratio is 54.23, which is relatively high, indicating that the stock may be overvalued compared to companies with similar earnings.
   • The Price-to-Sales (P/S) ratio is 3.47, and the Price-to-Book (P/B) ratio is 8.91, both of which are above the median for the retail sector, suggesting a premium valuation.
3. Performance and Analyst Opinions:
   • Despite underperformance in the past, Amazon has shown strong revenue growth and increased profitability, which could support its future growth and valuation.
   • Morningstar rates Amazon's stock as overvalued compared to its long-term fair value estimate of $304, which is significantly below the current market price.
4. Financial Health and Growth Prospects:
   • Amazon's financials show a strong revenue base and a significant increase in remaining performance obligations, which could indicate future revenue acceleration.
   • The company's initiatives in cloud computing, advertising, and subscription services are progressing well, which could drive long-term growth.

In conclusion, while Amazon has strong growth prospects and financial health, its current valuation appears to be at a premium compared to its intrinsic value and the valuation metrics suggest it may be overvalued. However, the company's strategic initiatives and growth potential could support a premium valuation in the long term. Investors should consider their investment horizon and the potential for Amazon to deliver on its growth plans when making investment decisions.