Bob Peck Sees Amazon's AWS Worth $100+ Billion, Reiterates At Neutral

SunTrust Robinson Humphrey’s Robert S. Peck pointed out that the AWS cloud platform already accounts for a large portion of the valuation, services and future of Amazon.com, Inc. AMZN.

The analyst maintained a Neutral rating on the company, with a price target of $600.

AWS Worth >$100 Billion

“We think Amazon is positioned well in a large and growing market and believe the AWS asset is worth >$100 billion,” Peck stated.

Peck also noted that Amazon was not only a dominant player in the cloud market, but also a pioneer in this space. With current market share of about 42 percent, the company is likely to see significant opportunity going forward.

Related Link: Don't Fear, Amazon AWS Channel Checks Indicate Nothing's Changed

Rapid Revenue Growth

The analyst also mentioned that Amazon has seen “rapid revenue growth” of 70 percent, with a robust operating margin profile of about 25 percent and a TAM of $50 billion by 2019.

With its revenues of $8 billion growing at a rate of 70 percent, combined with robust EBITDA margins of 50-55 percent, Peck believes that AWS could be valued at more than $100 billion, “implying a ~7x revenue multiple and a ~12x EBITDA multiple.”

We think these multiples are reasonable and perhaps conservative given comparison trading multiples.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasPrice TargetReiterationAnalyst RatingsTrading IdeasBob PeckRobert S. PeckSunTrust Robinson Humphrey
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!