Piper Jaffray top analyst Gene Munster is diving in on Amazon.com, Inc. (NASDAQ:AMZN) after his proprietary analysis of Google search trends from his Web Analytics platform reveals the online retail giant has little to no traces of deceleration in the fourth quarter, compared to the 28% experienced in its third quarter.
Therefore, on back of the company’s sustained strength in quarterly unit growth, the analyst reiterates an Overweight rating on shares of AMZN with a $900 price target, which represents a 17% increase from current levels.
On top of Munster’s stellar performance as one of Wall Street’s leading analysts, why else should you trust his word on the matter? The analyst has a consistent track record when it comes to AMZN, as he notes, “Over the past four quarters, our regression analysis has performed well leading us to estimates that are on average ~2.0ppts under the actual unit growth. We note that over the past 34 quarters our principal component regression analysis has correlated 0.95 with Amazon reported unit growth.”
Ultimately, “Street retail revenue estimates implicitly assume 3-4ppts of deceleration – should unit growth come inline with our Index, Amazon would likely report overall revenue 1%-2% above the Street. We note, however, that the bulk of Amazon’s Dec-16 revenue comes in the month of December, which is not yet available. We continue to view AMZN as the best-positioned stock in our coverage over the next five years, driven by continued retail unit growth strength, operating margin expansion, and future expansion from new categories through its platform,” Munster contends.
Gene Munster has a very good TipRanks score with a 62% success rate and he is ranked #18 out of 4,262 analysts. Munster yields 15.8% in his annual returns. When recommending AMZN, Munster garners 32.3% in average profits on the stock.
TipRanks analytics demonstrate AMZN as a Strong Buy. Out of 35 analysts polled in the last 3 months by TipRanks, 33 are bullish on Amazon stock and 2 remain sidelined. With a return potential of nearly 24%, the stock’s consensus target price stands at $947.45.