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    Amazon.com (AMZN) Could Be 48% Undervalued As It Expands Prime Delivery Perks

    Simply Wall St·09/25/2026 20:21:40
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    Amazon.com (AMZN) just retooled its logistics offering for merchants in a very specific way. The retailer is extending fast, free Prime delivery and rolling out discounted multichannel fulfillment fees.

    Recent moves in logistics come against a backdrop where Amazon.com’s share price has gained 7.17% over 90 days and delivered a 10.10% year-to-date share price return, while the 3-year total shareholder return of 97.95% indicates stronger longer term momentum compared with the shorter term pullback over the past month.

    Scan how other e-commerce and logistics heavyweights are repositioning themselves for faster delivery and margin pressure with our hand picked 87 AI infrastructure stocks.

    Amazon.com’s new supply chain perks for merchants sit at the intersection of robust logistics execution and a market still debating how much to pay for that consistency. Is the current valuation reflecting the business or the mood around it?

    Most Popular Narrative: 48% Undervalued

    Amazon.com last closed at $249.38 while the most followed narrative on the stock points to a fair value of $475.09, which implies a much richer view of what the business could be worth than the market is currently pricing in.

    Amazon is a company of two sides: a high tech, high margin side, comprising its AWS, Advertising and subscription services segments; and its more traditionally known low margin, high volume stores and third-party seller segments. These two sides form a cohesive whole. The Amazon online store motivates customers to purchase subscriptions and hosts its advertising. AWS underpins the functioning of the online store, but is also easy to integrate with for Amazon's many third-party sellers, encouraging adoption. However, the different sides have different growth prospects. The high margin side is expected to continue to experience high (15%+ annual) growth, while maintaining its relatively high profit margin (~30-40%), which would lead to strong profit expansion for Amazon as a whole. Whereas the low margin, high volume side of Amazon is expected to continue to grow at its fairly steady pace (5-10% annually) and continue to be limited by its low profit margin (<5%). Despite that, Amazon's unique business mix is projected to result in overall yearly revenue gains of ~9% and net profit margins of ~15%, leading to projected revenues of ~$1T and earnings of ~$150B in 5 years.

    See why 255 investors see Amazon.com as 48% undervalued.

    Result: Fair Value of $475.09 (UNDERVALUED)

    Still, the Amazon.com story can break if AWS or advertising underperform expectations, or if retail logistics costs squeeze the high margin side harder than bulls assume.

    Find out about the key risks to this Amazon.com narrative.

    Next Steps

    Curious whether the optimism around Amazon.com outweighs the concerns, or the other way around, given there are both flagged risks and clear potential upsides? If you want to pressure test that balance against the underlying data, start with the 4 key rewards and 2 important warning signs.

    Looking for more investment ideas beyond Amazon.com?

    Amazon.com may be your starting point, but your portfolio deserves a wider bench of opportunities that match your goals, risk comfort, and time horizon.

    • Hunt for potential value plays by scanning the 30 high quality undervalued stocks that combine strong fundamentals with prices that may not fully reflect their underlying businesses.
    • Lock in potential income streams by reviewing the 8 dividend fortresses and focus on companies that pair higher yields with resilient cash generation.
    • Protect your downside by filtering through the 30 resilient stocks with low risk scores so you can focus on businesses with sturdier balance sheets and steadier profiles.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.