Another Amazon Analyst Joins The $1,000 Price Target Club

Cantor Fitzgerald’s Youssef Squali believes that a tipping point is being reached in e-commerce, with revenue growth accelerating year on year in the US for the first nine months of 2016.

Squali maintained a Buy rating on Amazon.com, Inc. AMZN, while raising the price target from $835 to $1,000.

The analyst explained that the price target was raised “to reflect continued strength in core retail and sustained momentum in AWS.”

Related Link: Amazon Will Deliver This Quarter, Says Deutsche Bank

Squali believes the trend of accelerating revenue growth plays right into Amazon’s hands, given Prime’s increasing user base, the consistently improving value proposition and the company growing share of online retail searches.

As the leader in e-commerce, the analyst expects Amazon to witness 26 percent year-on-year revenue growth in Q3 2016, while the e-commerce forecast for the holiday season suggests further acceleration.

“We expect AWS’s strong economics to continue to fund growth initiatives at Amazon, widening its competitive moat in retail,” Squali stated.

Longer Term Stock

The analyst believes that while the stock valuation might not appear cheap, investors need to take a longer-term view.

As long as Amazon continues to gain share of the more than $10 trillion market and delivers steady margin improvements, the stock is likely to move up.

“Given the propensity of Prime members to spend 2-3x more annually than non-Prime members, we estimate that the company’s robust pace of growth should continue,” Squali added.

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