How High Can Amazon.com, Inc. Stock Go?

GBH Insights' Daniel Ives shares bullish insights on the e-commerce player on the heels of its fourth consecutive earnings beat.


Amazon.com, Inc. (NASDAQ:AMZN) investors must be thrilled after the e-commerce giant just handed over its fourth consecutive quarterly beat- one that rode a wave of success from a killer Black Friday and Cyber Monday holiday season performance. In reaction, shares are flying close to 6% today.

GBH Insights analyst Daniel Ives notes that though the company did not unveil just how many consumers have now been magnetized to its Prime membership base, he bets the number circles 90 million Prime members- calling Amazon Prime an “unmatched consumer fortress.”

On back of “another blow out quarter” from the consumer giant, the analyst reiterates a Highly Attractive rating on AMZN stock with a price target of $1,500, which implies a 2% upside from current levels. (To watch Ives’ track record, click here)

For the fourth quarter, Amazon’s total revenues shot up to $60.45 billion with pro forma EPS reaching $3.75- which includes both tax as well as additional one-time advantages. This marks a trouncing of the Street’s expectations calling for $59.75 billion in revenue and $1.88 in EPS. After Amazon’s standout holiday season, North America retail captivated most of the quarter’s attention, by Ives’ assessment, yielding a meaningful outclass. Thanks to the strength of Black Friday and Cyber Monday, which Ives deems a “major catalyst,” Amazon grabbed around 47% – nearly half – of total e-commerce spending throughout the holiday season, by the analyst’s calculation.

Overall, “International also handily beat which speaks to the company’s ‘land and expand’ strategy paying dividends yet again this quarter with strong momentum heading into 2018. As evidenced this quarter Bezos & Co. have an ‘iron grip’ on e-commerce spending which is showing no signs of slowing down into 2018 […] Prime growth remains the key jewel for Amazon going forward as cross-selling around Whole Foods customers and putting up more walls/barriers around its growing Prime customer base is a major ingredient in Amazon’s ability to fend off competition. International growth on Prime will also be another catalyst that we expect to play out in 2018 and should help further drive better than expected e-commerce retail growth in the year ahead. On another note, AWS revenue of $5.11 billion beat the Street at $4.97 billion as this remains a pillar of cloud strength along with what we saw from Microsoft last night in this two horse race for enterprise cloud success,” Ives surmises.

TipRanks shows strong bullish analyst sentiment circulating through the market grapevine. Out of 33 analysts polled in the last 3 months, a whopping 32 are bullish on Amazon stock with just 1 playing it safe with a neutral stance. With a return potential of nearly 9%, the stock’s consensus target price stands at $1,510.81.