Amazon.com, Inc.

DCF to market gap -25.1% (tolerance 15.0%). the steady state after FY2031: the horizon's core operating margin (Analysis, Core operating margin at FY2031, about 15.5 per cent) at the model's 9.1 per cent WACC and 3.8 per cent growth: The DCF equity value is about 25 per cent below the market capitalisation. The continuing value carries 96 per cent of the enterprise value, so the gap is the steady state: the market's enterprise value needs FY2031's NOPAT about 1.4 times the model's, a core operating margin near 21 per cent rather than 15.5 (FY2026: 14.4), or a WACC near 7.0 per cent (the market-implied WACC) instead of 9.1. The market prices in residual operating income growing 5.7 per cent a year forever; net sales grew 11.1 per cent a year over FY2021 to FY2025 and ROIC ran 8.9 to 23.6 per cent over FY2022 to FY2025. The

RI to market gap -24.5% (tolerance 15.0%). the same horizon margin, and residual operating income held to GDP growth after FY2031: Residual income is about 25 per cent below the market capitalisation for the DCF's reason: the market's enterprise value implies the horizon's residual operating income grows 5.7 per cent a year after FY2031 rather than the 3.8 of GDP; a horizon core operating margin near 21 per cent instead of 15.5 closes it.