As the holiday shopping season has come to a close, Amazon (NASDAQ: AMZN) is reporting record-breaking numbers as more than 10 million new customers tried Amazon Prime for the first time. Amazon, the e-commerce giant, offers special services to Amazon Prime members including free two-day shipping and special access to deals, music, and videos. Customers can purchase Amazon Prime for $99 per year.
Manhattanites have been experiencing the latest addition to Prime perks since December 18th, when Amazon announced one-hour delivery on certain items in select areas of Manhattan. The new fulfillment center on 34th Street serves as the hub of this service.
An Amazon press release dated December 26th revealed that Amazon shipped products to 185 countries this holiday season and saw a ten-fold year-over-year increase in Same Day Delivery services. Amazon also reported that almost 60% of customers placed orders on a mobile device and that Black Friday saw “the most rapid growth in mobile shopping.” Additionally, 16 times more customers shopped on Amazon Smile than last year’s holiday season, supporting 7 times more charities than last year.
On December 26th, analyst Colin Sebastian of R.W. Baird reiterated an Outperform rating on Amazon with a $340 price target in response to Amazon’s press release. Sebastian noted that because nearly 60% of customers placed orders on mobile devices, “many Amazon customers are frequently ‘show-rooming,’” meaning browsing for items in brick-and-mortar stores while purchasing them online. He continued, “In addition, Mobile continues to accelerate the secular shift from offline to online purchases, in our view, as consumer use-cases for last minute shopping, in-store purchases, and price comparison continue to expand.” Amazon’s press release acknowledged 10 million new Prime subscribers, giving Sebastian reason to believe that Amazon Prime now has over 30 million subscribers.
Sebastian has rated Amazon 21 times since April of 2009, earning him a 53% success rate recommending the e-commerce site with an average return of +10.6% per recommendation.
Colin Sebastian has rated many websites in the past including eBay (NASDAQ: EBAY) and Facebook (NASDAQ: FB). He has rated eBay 16 times since September of 2009, earning him a
94% success rate recommending the stock with an average return of +17.8%. Additionally, the analyst has rated Facebook 10 times since June of 2012 with a 78% overall success rate recommending the stock and a +28.9% average return per Facebook recommendation.
Overall, Sebastian has a 58% success rate recommending stocks with an average return of +12.2% per recommendation.
Sebastian seems confident in Amazon, but will the e-commerce giant be able to sustain exponential growth?
The top analyst consensus for AMZN on TipRanks is Moderate Buy.