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Amazon.com, Inc. (AMZN) stock analysis

Amazon heads into Oct 29 earnings with rich implied volatility, a flat trend and heavy capex

Amazon closed at 253.10 on Oct 27, 2026, 11.87% below its 52-week high, two days before earnings after the close on Oct 29. Revenue growth is 15.77% year over year, but trailing free cash flow is -$11.62B as capex runs at -173.03B. Options imply an 8.42% earnings move, and analysts' mean target is 332.47.

  • Price: 253.10
  • Market Cap (USD): $2.72T
  • P/E: 20.12×
  • Fwd P/E: 23.72×
  • Div Yield: 0.00%
  • 1Y Return: 12.89%
  • Next Earnings: Oct 29, 2026
  • Mean Target: 332.47
  • Rating: Strong Buy

Bull case

  • Revenue growth of 19.62% in the latest quarter and 15.77% over the trailing year sit in the 83rd percentile of US Consumer Discretionary, against a sector median of 8.59%.
  • Q2 FY2026 diluted EPS was 5.75 against a consensus of 1.82 (a 215.93% surprise); the stock moved 19.82% on Jul 30, 2026.
  • 40 analysts give a mean target of 332.47, 31.36% above the price, and 84 of the Buy-type ratings are Buy against 9 Hold and 1 Sell.

Bear case

  • Trailing free cash flow is -$11.62B because capex of -173.03B exceeds operating cash flow of 161.40B, giving a free cash flow yield of -0.43% (6th percentile in the sector).
  • Consensus EPS falls from 12.86 for the current fiscal year to 10.67 for next year, and next-year EPS growth of -17.04% is in the 0th percentile of peers.
  • Insiders made 27 sales and no buys in 90 days with net value of -365.0M, including Jeffrey Bezos selling 1.2M shares worth 346.5M on Aug 3, 2026.

What to watch

  • Q3 earnings on Oct 29, 2026 after the close; options imply an 8.42% move.
  • The 20-day high of 265.34 and 20-day low of 246.08 as near-term range boundaries.
  • The 200-day average at 243.34, 4.01% below the price, and the 52-week high of 287.20.
  • Short interest (next update after Oct 15, 2026), currently 93.7M shares, up 8.08%.

General

Amazon is a retail, advertising, subscription and cloud company that is growing revenue at a double-digit rate while spending heavily on capital investment. The stock sits mid-range ahead of earnings on Oct 29, 2026, with analysts positive and valuation above sector norms.

Business

Per its profile, Amazon operates North America, International and AWS segments. In fiscal 2025, North America was 59.46% of revenue, International 22.58% and AWS 17.96%. By product, online stores were 37.56%, third-party seller services 24.01% and advertising services 9.57%.

Performance

Trailing revenue is $775.68B, up 15.77% year over year. Operating margin is 12.08%, up 0.71% over the year, and net margin is 17.44%. Q2 FY2026 revenue was 200.61B with operating income of 27.46B.

Valuation and analysts

Forward P/E is 23.72 on next year's consensus EPS, in the 74th percentile of the sector against a median of 16.38. The 40 analysts' mean target is 332.47, with no upgrades or downgrades in 30 days. UBS reiterated Buy on Oct 26, 2026.

Main risks

Free cash flow is negative at -$11.62B due to capex. Current ratio is 1.03 and one-year maximum drawdown is -21.74%. Beta is 1.48, so the stock has tended to move more than the market.

Long-term investor

Amazon has compounded revenue and restored profitability since fiscal 2022, but returns on capital are middling and free cash flow has turned negative as spending rises. Valuation is above peers on forward earnings, and the balance sheet is moderate.

Growth durability

Revenue rose from 469.82B in fiscal 2021 to 716.92B in fiscal 2025, with a 5-year CAGR of 13.18%. Diluted EPS went from -0.27 in fiscal 2022 to 7.17 in fiscal 2025. Revenue growth has accelerated for 5 quarters.

Margins and returns

Gross margin is 50.77% (80th percentile) and operating margin 12.08% (45th). ROE is 30.56%, but ROIC of 11.36% is below the sector median of 15.37% (40th percentile).

Balance sheet and cash

Total debt is 223.23B against 122.99B of cash and equivalents, with net debt to EBITDA of 0.39 and interest coverage of 28.13. Free cash flow fell from 32.88B in fiscal 2024 to 7.70B in fiscal 2025. No dividend is paid and annual buybacks show 0.00 in fiscal 2025.

Valuation and ownership

Forward P/E is 23.72 versus an industry median of 15.80. Consensus EPS drops from 12.86 to 10.67 for next year. Institutional ownership is 67.82%, up 3.13% over three months, while insiders sold 27 times in 90 days.

Swing trader

The trend is flat to mildly positive: price is just below the 20- and 50-day averages and above the 200-day, with weak momentum and low trend strength. Earnings on Oct 29, 2026 dominate the window.

Trend and momentum

Price of 253.10 is 0.71% below the 20-day average (254.90), 0.83% below the 50-day (255.21) and 4.01% above the 200-day (243.34). RSI is 48.58, MACD is -0.38 under its signal of 0.27, and ADX of 13.45 shows a weak trend.

Recent sessions

Shares fell from 262.37 on Oct 21 to 248.00 on Oct 23, then recovered to 253.10 on Oct 27 (up 1.61%) on 34.0M volume, 0.93 times normal. The five-day return is -3.63%.

Levels and risk

The 20-day range is 246.08 to 265.34 and the 52-week range is 196.00 to 287.20. ATR is 6.41, or 2.53% of price. The relative strength rating is 77.

Catalysts and positioning

Earnings are Oct 29, 2026 after the close, with an implied move of 8.42%. Short interest is 0.87% of float as of Oct 15, 2026, up 8.08%. Recent analyst actions have been reiterations.

Options

Implied volatility is elevated ahead of earnings, with the 30-day reading above realized volatility and a backwardated term structure. Liquidity is strong. Premium is rich relative to recent realized moves.

Volatility level

30-day implied volatility is 43.41%, with an IV rank of 73 and percentile of 90 against a 52-week range of 23.96% to 50.63%. That compares with 30-day historical volatility of 29.52%, a ratio of 1.47 times.

Term structure and skew

The curve is in backwardation: 30-day IV is 43.41% versus 37.07% at 90 days, a slope of -6.3 points, reflecting the earnings event. 25-delta skew is +2.5 points. The expected 30-day move is 12.44%.

Earnings move

The implied earnings move is 8.42% versus a 4-quarter average actual move of 9.42%, an 8-quarter average of 6.63% and a median of 4.53%. The largest was 19.82%. Average IV crush has been 34.39%.

Premium and liquidity

The 30-day cash-secured put yield is 31.89% annualized and the covered call yield 23.59%, for the Nov 27, 2026 expiry, which includes earnings. Put/call volume ratio is 0.36 and the liquidity score is 100.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.