Amazon.com Inc. (AMZN) Best Prime Day Ever Bolsters Momentum, Snap Inc (SNAP) Poses Compelling Opportunity to Investors


Amazon.com Prime Day Dethrones Black Friday

Amazon, Inc.’s (NASDAQ:AMZN) 30-hour Prime Day sales extravaganza this year was by far the company’s most successful yet. Sales grew by over 60% compared to last year’s event, as did annual customer growth by 50%. Amazon sites from Germany, Canada, and Japan saw impressive record order volumes, especially in the Fashion & Shoes, Home, and Health & Beauty categories. In fact, the company’s own shopping holiday has dethroned both Black Friday and Cyber Monday, marking their hottest shopping day in history.

Top analyst Colin Sebastian took Prime Day 2017 in bullish stride, commending the event “as a significant driver of incremental sales volume, as well as a strong form of brand advertising to drive increased traffic and visibility ahead of the traditionally stronger holiday shopping season.” The analyst also noted Amazon’s ability to draw from the momentum of other shopping days developed by companies like Alibaba and JD.com, and by doing so, even provided a lift to the wider e-commerce market.  “Our checks with online sellers indicated […] Amazon’s efforts may also be providing a slight boost to the broader e-commerce market,” highlights Sebastian.

Prime Day also signaled a sharp increase in user engagement and identification with Amazon’s own product lines, with record purchases on all Echo, Fire tablets, and Kindle devices. Furthermore, this year witnessed a seven-fold increase on purchases of Amazon products. Also noteworthy was the boost in the usage of Amazon’s mobile app, which has more than doubled since this time last year. Sebastian views this as “An encouraging sign as Amazon works to drive higher levels of user engagement in the broader Amazon ecosystem.”

Amazon continues to leverage ongoing AI/ML technology, online retail, and transportation. With the online auction and retail giant experiencing both significant sales-customer growth paired with better customer brand identification, Sebastian maintains his positive perspective on the company’s prospects down the line.

In reaction, the analyst reiterates an Outperform rating on shares of AMZN with a price target of $1,100, indicating an upside of 10%. Looking ahead to 2018, Sebastian projects Amazon will reach around $167 billion in retail revenue along with an additional $5.7 billion in Advertising/Other revenues. (To watch Sebastian’s track record click here.)

TipRanks analytics demonstrate AMZN as a Strong Buy. Out of 28 analysts polled by TipRanks in the last 3 months, 25 are bullish on Amazon stock while 3 are neutral. With a return potential of nearly 13%, the stock’s consensus target price stands at $1,126.70.

Snap Shares Showcase Favorable Risk/Reward Factor; Stifel Gets Bullish

Are the “wheels” “falling off” from Snap Inc’s (NYSE:SNAP) user growth arc or is the market in sheer overreaction mode? According to Stifel analyst Scott Devitt, the popular Snapchat app parent company could be filling the gap that Twitter has presently not been able to fill, making its name a bold one in the social communication game. For those who whisper apprehensively that Facebook acquisition Instagram and its copy-cat move for Stories could be snapping up prospective users in Snap’s target range, Devitt finds short-term concerns inflated. Over 3 billion Snaps are on average being created per day, which is a solid surge from 2.5 billion in the third quarter of last year.

Starting next month, 950 million plus extra shares of Snap stock will be set loose for possible purchase, and it is a lock-up event that has investors captivated. Does Devitt see this as a game-changer? Maybe not, the analyst says, as about 60% of these shares Snap directors and officers control, with close to 50% in the pockets of the company’s co-founders. The real crux for the analyst’s new bullish optimism, as he is now “relishing the opportunity” to own Snap shares lies in the core business’ robust fundamentals and savvy, innovative whirls forward for consumers matched by “sophisticated” tools to nab advertising interest.

In reaction, the analyst upgrades SNAP from a Hold to a Buy rating with a $22 price target, which represents a 40% increase from current levels. (To watch Devitt’s track record click here.)

Overall, the “bigger picture” for Devitt is a positive one, as he concludes, “In our view, Snap is what investors have long wanted (and many still want) Twitter to be; a thriving communications platform for hundreds of millions of high-value consumers whose nimble product innovation can drive engagement / monetization in the face of competition from Internet behemoths like Google, Facebook, and Amazon. Investors have always gotten disproportionate value from Twitter’s service relative to the rest of society, leading to a natural bias toward buying into Twitter’s investment story even when the data looked increasingly bleak. Many of these individuals don’t use or understand Snap (yet), leading to a negative bias despite healthy underlying growth trends and compelling upside if Snap executes on monetization. We think this creates an opportunity for investors that can take a step back from their personal preferences and look at the data.”

TipRanks analytics demonstrate SNAP as a Buy. Based on 29 analysts polled by TipRanks in the last 3 months, 12 rate a Buy on Snap stock, 13 maintain a Hold, while 4 issue a Sell on the stock. The 12-month average potential stands at $20.98, marking a nearly 38% upside from where the stock is currently trading.