Amazon.com, Inc. (AMZN) vs Darden Restaurants, Inc. (DRI): Which Is the Better Buy in 2026?
As of 2026-09-17, AMZN is overvalued at $252, with a DCF intrinsic value of $98 and a margin of safety of -156%. DRI is fairly valued at $208, with an intrinsic value of $189 and a margin of safety of -10%. Of the two, DRI has the wider margin of safety.
Rewards
- ★Each dollar of retained earnings has created $5.34 of earning power — management is an exceptional capital allocator.
- ★Trailing P/E of 20.3x is 50% below the historical average of 40.6x — potentially undervalued relative to its own history.
- ★Altman Z-Score of 5.30 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Darden Restaurants, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Darden Restaurants, Inc. scores 91/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
Risks
- ⚠FCF yield of 0.3% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠11 insider sales totaling $365.0M with no purchases in the past 3 months — insiders are reducing their exposure.
- ⚠Gross margin of 21.7% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠High leverage (3.55x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠6 insider sales totaling $15.2M with no purchases in the past 3 months — insiders are reducing their exposure.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $252?
The market implies +15.9% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +49.4%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $208?
The market implies +11.3% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +12.7%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving margin stability would strengthen the moat.
Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: AMZN vs DRI
Is Amazon.com, Inc. or Darden Restaurants, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, DRI trades at a -9.6% margin of safety (intrinsic value $189 vs. price $208), compared to AMZN's -156.1% margin of safety (intrinsic $98 vs. $252).
Which stock has a wider economic moat, Amazon.com, Inc. or Darden Restaurants, Inc.?▼
DRI scores 91/100 (Wide moat), while AMZN scores 51/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Darden Restaurants, Inc. in financial distress?▼
DRI's Altman Z-Score of 2.6 places it in the Grey zone, signaling elevated bankruptcy risk. AMZN scores 5.3 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Amazon.com, Inc. or Darden Restaurants, Inc.?▼
Darden Restaurants, Inc. (DRI) generates a 4.6% free cash flow yield, compared to Amazon.com, Inc.'s 0.3%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Amazon.com, Inc. or Darden Restaurants, Inc.?▼
DRI earns 14.4% ROIC versus AMZN's 10.4%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.