Will Amazon’s (AMZN) obsessive customer fan-base make room for another Amazon expedition? Last week, the tech company announced “Amazon Comprehend Medical,” a HIPAA-eligible healthcare software that digitalizes patients’ health records. If you’re thinking that this service already exists, that’s because it does. However, Amazon’s software is supposed to be more structured, efficient and help reduce costs. AMZN is marketing the technology as having a significant value in extracting clinical data for medical billing and coding, recruiting patients for clinical trials and providing clinical decision support at point of care.
If you ask RBC Capital’s Mark Mahaney what Amazon’s goal is in the medical game – he would say the company is interested in taking share of or disrupting the $300 billion healthcare digitization market.
“The introduction of this new software demonstrates Amazon’s focus and investment in machine learning technology across verticals. It is clear that Amazon has a growing interest in the $3.2T healthcare market, given its ~$1B PillPack Inc. acquisition, its attempts to penetrate the medical supplies market, and this recent announcement of Amazon Comprehend Medical. What remains unclear still is how much of a disruptor will Amazon be in each of these three healthcare categories. We wonder if the big tech companies are better positioned to disrupt the healthcare industry vs. the traditional healthcare companies. That said, we believe that Amazon’s customer obsession will likely create material impact on consumers/patients within healthcare. In that sense, while Amazon could be a major disruptor in healthcare, it will likely be more successful with one part of healthcare over another, and hence it is touching different parts of this category,” Mahaney said.
With that said, Mahaney reiterates an Outperform rating with a price target of $2,300, showing an upside of 36% when comparing to the current cost of an AMZN share.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Mark Mahaney has a yearly average return of 21.9% and a 64% success rate. Mahaney has a 38.9% average return when recommending AMZN, and is ranked #35 out of 5,134 analysts.
Mahaney’s price target is a bit higher than the Street consensus, which stands at $2,163.97. The upside here is 28%. TipRanks analytics shows the stock is considered a Strong Buy, with 36 out of 37 Wall Street analysts bullish on the stock. Just one is sidelined. (See AMZN’s price targets and analyst ratings on TipRanks)