William Blair analyst Ryan Domyancic is out with a research report on Amazon.com, Inc. (NASDAQ:AMZN) after taking a comprehensive pricing survey, where he randomly selected 100 items from 32 retailers to compare their in-store assortment and pricing with Amazon. The verdict? As far as Domyancic sees it, this further highlights the value of Amazon Prime, whose eligible selection has risen considerably from 2014 with discounted pricing for “brick-and-mortar” retailers.
In reaction, the analyst reiterates an Outperform rating on shares of AMZN without suggesting a price target.
“For Prime members and order values that exceed the $49 free shipping threshold, we found that 67% of Prime eligible overlapping items were the same price or less expensive on Amazon versus retail stores. For items that have a retail price greater than $25, we found 77% of Prime eligible items were the same price or less expensive on Amazon.”
Meanwhile, the analyst also observed that the online auction and e-commerce leader’s item overlap hit 46% this year, which is an increase from his prior surveys, and Prime eligible overlap surges 50%.
“Our survey demonstrates that Prime item selection has grown considerably and the majority of Prime eligible overlapping items on Amazon are less expensive versus retail stores. We expect the Prime program to drive strong unit growth as Prime membership increases and Prime member order frequency increases,” Domyancic surmises.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, two-star analyst Ryan Domyancic is ranked #2,245 out of 4,229 analysts. Domyancic has a 67% success rate and realizes 8.5% in his yearly returns. When recommending AMZN, Domyancic yields 0.5% in average profits on the stock.
TipRanks analytics indicate AMZN as a Strong Buy. Based on 33 analysts polled by TipRanks (in the past 3 months), 31 rate a Buy on AMZN, while 2 maintain a Hold. With a return potential of 25%, the stock’s consensus target price stands at $948.74.