Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.0 |
| P/S | 7.9 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 5.2 |
| PEG | 6.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 24.4x
- ▸PEG: 1.26
AMZN · Why this verdict
Why Amazon.com (AMZN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroCAUTIOUS
TrendMatrix Research · core thesis
Engine thesis — one sentence
Amazon has a wide moat, a 27% return on equity and 25.4% upside to the $301.48 analyst target with a 3.96 reward-to-risk, but free cash flow is negative versus net income, momentum is weak after a high-volume selloff and insiders sold about $365 million.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Amazon has a wide economic moat, a 27% return on equity, 17% margins and a 7/9 Piotroski F-Score. Quality breakdown | Margins and return on equity should hold or improve over the next 12 months. | →Stable |
| CounterThe consumer cyclical sector modifier of -1.5 and weak growth score of 3.5/10 show the moat is not translating into strong near-term growth. | ||
Earnings quality is flagged as a red flag because free cash flow is -9% of net income. Quality breakdown | Free cash flow should recover toward net income as heavy investment spending normalizes. | →Stable |
| CounterNegative free cash flow likely reflects large growth investment rather than weak earnings, and may persist as long as spending stays elevated. | ||
The price of $240.35 sits 25.4% below the $301.48 analyst target, with 6.4% downside and a reward-to-risk of 3.96. Upside pct | Price should move toward the analyst target without breaching the $224.93 stop level. | ↓Deteriorating |
| CounterThe momentum score of 3.2/10 and an elevated put/call ratio of 1.40 suggest the market is not yet validating the target. | ||
The price is below its 200-day average, but that average is still rising (+1.3% over 30 days), pointing to a pullback in an uptrend, though a volume surge of 2.5x the average on the selloff and falling on-balance volume show distribution. Momentum breakdown | The price should reclaim the 200-day average and volume should turn to accumulation. | ↓Deteriorating |
| CounterHeavy-volume selling with falling on-balance volume often marks the start of a deeper trend break. | ||
Insiders sold about $365 million across 27 transactions in 90 days with no purchases, a bearish signal although only 0.014% of market cap. Net value 90d | Insider selling should stay immaterial relative to the market cap. | ↓Deteriorating |
| CounterExecutive stock sales at large companies are often pre-planned, so the dollar amount may carry little information. | ||
Amazon has a wide economic moat, a 27% return on equity, 17% margins and a 7/9 Piotroski F-Score.
→StableQuality breakdown
- Expectation
- Margins and return on equity should hold or improve over the next 12 months.
CounterThe consumer cyclical sector modifier of -1.5 and weak growth score of 3.5/10 show the moat is not translating into strong near-term growth.
Earnings quality is flagged as a red flag because free cash flow is -9% of net income.
→StableQuality breakdown
- Expectation
- Free cash flow should recover toward net income as heavy investment spending normalizes.
CounterNegative free cash flow likely reflects large growth investment rather than weak earnings, and may persist as long as spending stays elevated.
The price of $240.35 sits 25.4% below the $301.48 analyst target, with 6.4% downside and a reward-to-risk of 3.96.
↓DeterioratingUpside pct
- Expectation
- Price should move toward the analyst target without breaching the $224.93 stop level.
CounterThe momentum score of 3.2/10 and an elevated put/call ratio of 1.40 suggest the market is not yet validating the target.
The price is below its 200-day average, but that average is still rising (+1.3% over 30 days), pointing to a pullback in an uptrend, though a volume surge of 2.5x the average on the selloff and falling on-balance volume show distribution.
↓DeterioratingMomentum breakdown
- Expectation
- The price should reclaim the 200-day average and volume should turn to accumulation.
CounterHeavy-volume selling with falling on-balance volume often marks the start of a deeper trend break.
Insiders sold about $365 million across 27 transactions in 90 days with no purchases, a bearish signal although only 0.014% of market cap.
↓DeterioratingNet value 90d
- Expectation
- Insider selling should stay immaterial relative to the market cap.
CounterExecutive stock sales at large companies are often pre-planned, so the dollar amount may carry little information.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.1 |
| ROA | 4.4 |
| Gross margin | 6.3 |
| Op margin | 5.2 |
| Net margin | 8.5 |
| Current ratio | 4.0 |
| FCF quality | 0.0 |
| Moat | 8.2 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 27%
- ▸Strong margins: 17%
- ▸Earnings quality RED FLAG: -26% FCF/NI
- ▸Wide economic moat
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 1.4 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.2 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 9.0 |
| Price target | 7.9 |
- ▸Analyst upside: 22%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.7 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $18,545,509 (0.001% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.5 |
| quality rank | 7.8 |
| growth rank | 3.1 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 1.7 |
| 52w position | 8.6 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 8.6 |
| volatility | 2.6 |
| put call | 3.8 |
| implied vol | 6.2 |
| max pain risk | 3.0 |
| beta | 5.0 |
| debt equity | 8.0 |
- ▸Above max pain $140
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:84d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.9<1.5@spot
Warning (0)
none
Reward-to-Risk
0.88
Upside
+12.5%
Downside
14.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.50>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.9<1.5@spot) reinforce the read. Current asymmetry R:R is 0.88 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.4, Momentum at 7.0, and Catalyst at 6.7; the weakest are Growth at 3.5, Technical at 4.1, and Insider at 4.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.88 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat High Return Quality
Trip ifMargins fall below 12% from the current 17%.
- P2Negative Free Cash Flow Flag
Trip ifFCF-to-net-income conversion rises above 50% from the current -9%.
- P3Large Upside To Analyst Target
Trip ifAnalyst target falls below $265, less than 10% above the current $240.35 price.
- P4Pullback In Rising Trend
Trip ifThe 200-day moving average 30-day slope falls below 0% from the current +1.3%.
- P5Large Insider Selling
Trip ifNet insider selling exceeds $750 million over 90 days from the current $365 million.