Amazon CAPE ratio

The CAPE ratio for Amazon measures its current stock price relative to the average inflation-adjusted earnings over the past 10 years. Since Amazon has historically reinvested much of its earnings into growth, its CAPE ratio is often higher than more established companies. A high CAPE ratio could suggest that Amazon is overvalued, with future returns potentially lower, while a low ratio might signal undervaluation and growth potential. Investors use Amazon’s CAPE ratio to assess its long-term valuation, though its growth strategy often leads to a higher ratio compared to traditional value stocks.