SunTrust's Robert Peck Sees $300 Million Gross Profit In Amazon's Local Register
Amazon.com's (NASDAQ: AMZN) launch of a mobile credit card reading device could add one percent to its annual gross profit, one analyst said Thursday.
Called the Amazon Local Register, it's priced to undercut existing comparable devices including those from eBay's (NASDAQ: EBAY) PayPal and privately-held Square.
SunTrust's Robert Peck said the new Amazon device and associated accessories like receipt printers, cash drawers and phone cases could reap $1.1 billion in annual revenue and $300 million in gross profit along with a break-even operating result. Amazon's 2013 revenue was $74.4 billion.
Peck said the device could dovetail with Amazon's plan to enter the local marketplace, offering services like repair and installation to homeowners while taking a 20 percent cut.
Peck maintained a Buy rating on the shares and a $380 target.
Local Register customers signing up before October 31 get a promotional transaction rate of 1.75 percent for a year. The standard rate of 2.5 percent compares with PayPal's 2.7 percent and Square's 2.75 percent.
“We understand that every penny and every minute counts," Amazon's local commerce head Matt Swann said in a statement Wednesday.
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