Is Amazon.com, Inc. overvalued or undervalued?

As of 28 May 2025, the valuation grade for Amazon.com, Inc. has moved from fair to expensive, indicating a shift in its market perception. The company is currently considered overvalued. Key ratios include a P/E ratio of 36, an EV to EBITDA of 18.37, and a PEG ratio of 0.55, which suggests that while growth expectations are factored in, the current valuation may not be justified by its earnings growth potential.
In comparison to peers, MercadoLibre, Inc. has a significantly higher P/E ratio of 58.78, while eBay, Inc. stands at 55.51, both indicating that Amazon's valuation is on the higher end relative to its direct competitors. Despite a recent downturn in stock performance relative to the S&P 500, with a year-to-date return of -4.98% compared to the index's 2.44%, Amazon's long-term performance over three years shows an 85.41% increase, which still reflects strong growth potential but may not support its current valuation.