Are Amazon.com, Inc. (NASDAQ:AMZN) shares skirting valuation of $1,800 to $1,900?
One expert says “easily” so- even if some traders consider the current valuation “hard to swallow.”
Goldman Sachs analyst Heath Terry is an enthusiastic bull on this e-commerce king, noting that even though shares currently circle near $1,600, the upside potential waiting in the wings is immense.
Specifically, Terry makes a case that Wall Street is underestimating the e-commerce king’s cloud and retail segments. After all, this is a company that has maximized two of the tech-verse’s mammoth growth trends, and investors raring to take the bet could glean big “advantage” here. On back of Terry’s bullish note, shares were surging almost 3% yesterday.
“When you look at the kind of growth that you are seeing, particularly in their AWS (Amazon Web Services) business, which is over half the value of the company, there’s a lot of potential for upside to the current stock price as estimates in that business come up just given the level of investors’ sensitivity to that,” explains Terry to CNBC.
“The big case for Amazon is that they are addressing two of the largest trends in technology right now: the shift of retail details online, and the shift of compute dollars into the cloud,” continues the analyst, adding: “Amazon is leading on both of those fronts. So anytime you can get a company that’s leveraged into two of the biggest growth trends that there are in technology, you want to take advantage of it.”
Ultimately, “We continue to believe that estimates for both businesses (cloud and retail) are too low, particularly as you see store closures in the U.S. on the retail side of the business, and particularly as enterprise spending starts to accelerate on the tech side,” contends Terry, confident that 2018 is set to be a good year for AMZN investors.
Therefore, the analyst reiterates a Conviction Buy rating on AMZN with a $1,825 price target, which implies a close to 15% upside from current levels. (To watch Terry’s track record, click here)
This e-commerce empire flashes a strong bullish backing on TipRanks, making this stock a Wall Street favorite. Out of 39 analysts polled in the last 3 months, 37 are bullish on AMZN stock while only 2 play it safe on the sidelines. With a return potential of 6%, the stock’s consensus target price stands at $1,689.10.