Robert W. Baird analyst Colin Sebastian is out today with an update on Amazon.com, Inc. (NASDAQ:AMZN), straight from re:Invent, the biggest event of the year for AWS. The analyst rates the stock an Outperform, with a $630 price target, which implies an upside of 19% from current levels.
Sebastian noted, “Today, Amazon announced QuickSight, a business intelligence tool[..[We highlight this announcement as additional evidence of Amazon moving “up-the-stack,” building off of its leading position in infrastructure-as-a-service (IaaS) into more “value-added” software-as-a-service (SaaS) applications. Amazon has also separately announced other SaaS services such as e-mail (WorkMail), file-sharing (Zocalo), and virtual desktops (WorkSpaces)”
Furthermore, “In terms of assessing how Amazon may evolve its SaaS offering, we point to Google Apps, which offers core products such as e-mail, calendar, file-sharing, spreadsheet, presentation, word-processing and video-conferencing capabilities. While Amazon’s intentions may be to work more in the back end of existing infrastructure, we would not be surprised if Amazon continues to broaden its enterprise offering to include other cloud-based productivity solutions.”
Bottom line: “We view the continued AWS build-out in “value-added” SaaS applications as a net positive that increases the addressable market and enhances customer “stickiness.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Sebastian has a total average return of 18.0% and a 73.2% success rate. Sebastian has a 35.7% average return when recommending AMZN, and is ranked #35 out of 3772 analysts.
Out of the 43 analysts polled by TipRanks, 37 rate Amazon stock a Buy, while 6 rate the stock a Hold. With a return potential of 11.7%, the stock’s consensus target price stands at $593.30.