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Amazon Prime Reaches 100 Million Member Milestone: Here's What It Means For The Stock

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Amazon Prime Reaches 100 Million Member Milestone: Here's What It Means For The Stock
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Amazon.com, Inc. (NASDAQ: AMZN) dominated the headlines Thursday morning after reporting it now has 100 million Prime members. While the 100 million number certainly marks a milestone for the company, the big question in investors’ minds is so what?

What Happened

The 100 million mark suggests Amazon is on track to hit Bank of America’s year-end 2018 Prime subscriber target of 137 million, analyst Justin Post said in a note. He also says Prime is roughly in-line with Netflix, Inc. (NASDAQ: NFLX), which reported 125 million subscribers in the first quarter.

Prime remains the epicenter of the Amazon ecosystem, and other Amazon initiatives, such as Prime Video, serve to drive more users to that ecosystem. Post says Amazon’s pursuit of NFL "Thursday Night Football" is an excellent example of the type of content that Amazon hopes will drive Prime adoption.

Why It's Important

“We think Amazon will continue to pursue live sports streaming deals ($50mn for NFL deal) as well as spend aggressively on original content to continue to build the Prime offering and compete with Netflix (we think continued content margin pressure likely in 2018),” he says.

Between dominant e-commerce market share, accelerating cloud services penetration and heavy investments in streaming media, Post says Amazon is a major player in all of the top investment themes in the internet space.

What's Next

Bank of America has a Buy rating and $1,650 price target for Amazon. The stock traded higher by 1.4 percent to $1,550 on Thursday following the release of the shareholder letter.

Related Links:

The 100 Million Club: Putting Amazon's Prime Memberships In Perspective

18 Internet Stocks And What To Do With Them 

Image Credit: Yolo0906 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Latest Ratings for AMZN

DateFirmActionFromTo
Feb 2019Pivotal ResearchInitiates Coverage OnBuy
Feb 2019Raymond JamesMaintainsOutperformOutperform
Feb 2019Deutsche BankMaintainsBuyBuy

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