Overview

This Amazon Case Study - Advanced Business Valuation Model is built to value AMZN's businesses and determine its target share price from the bottom up by following these steps:

  1. Calculate Amazon's Total Addressable Market (TAM) for each business segment, and determine the market share in each
  2. Use Amazon's actual financial statements (annual report, 10-K, 10-Q, etc) to build a historical 3-statement model
  3. Set up all the assumptions and drivers required to build out the DCF model
  4. Create a 10-year forecast for Amazon's business, including the three financial statements, supporting schedules, and free cash flow to the firm (FCFF)
  5. Look at Amazon-specific line items such as segmented revenue, stock-based compensation, and capital leases
  6. Perform advanced comparable company analysis (Comps) using Capital IQ and PitchBook Data
  7. Perform a Sum-Of-The-Parts (SOTP) valuation of Amazon
  8. Generate multiple operating scenarios to explore a range of outcomes and values for the business
  9. Compute AMZN's intrinsic value and IRR under each scenario
  10. Perform sensitivity analysis on key assumptions and assess the overall impact of the transaction

What this AMZN model includes:

  • Raw data and historical analysis
  • Market size and TAM
  • Scenarios
  • DCF assumptions
  • Comps data
  • WACC analysis
  • Quarterly data and LTM data
  • Summary dashboard

This model is very useful for advanced financial modelers who are looking to perform financial modeling and valuation using real-world company like Amazon which has a more complex business structure and operates in different business segments.

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Christopher Kelley

This valuation model for Amazon is so detailed! Amazing work

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