Market Overview

Munster: Amazon Leads In Automated Retail, A $50B Opportunity

Share:
Munster: Amazon Leads In Automated Retail, A $50B Opportunity
Related AMZN
Stock Market Appears To Focus On US-China Tariff News As US, Canada Continue Talks
New U.S. Tariffs On China Lighter Than Some Expected, Potentially Lending Positive Tone
EU regulators looking into Amazon's use of merchant data (Seeking Alpha)

Former Wall Street research analyst-turned-venture capitalist Gene Munster said Amazon.com, Inc. (NASDAQ: AMZN)'s first-quarter report shows the e-commerce giant continues to flex its "profit muscle."

The Expert

Munster, a managing partner at Loup Ventures, commented on Amazon's quarterly print in a blog post.

The Thesis

Here are Munster's main takeaways from Amazon's Q1 report:

  • Profitability exceeded analyst expectations by a factor of two.
  • Amazon's strong gross margin should "remind" investors of the company's true potential over time.
  • Retail growth of 22 percent was consistent with what was seen over the past two years.
  • AWS showed accelerated growth from 45 percent in the prior quarter to 49 percent.
  • AWS will remain a "killer platform" that will generate "favorable growth" ahead.
  • The Amazon Prime price increase should generate an incremental $2 billion in revenue that will be reinvested in the business.
  • Automated retail or self-checkout represents a $50-billion opportunity, and Amazon's Go store concept so far holds the "pole position" in the grocery space, Munster said. 

Amazon's margins are likely to dip lower as the company continues to aggressively expand its fulfillment capabilities, add new content to its platform and lower its AWS pricing, according to Loup Ventures. 

Price Action

Amazon shares were trading up 4.4 percent Friday afternoon at $1,584.76. 

Related Links: 

35 Stocks Moving In Friday's Mid-Day Session

Why The Price Of Amazon Prime Was Raised From $99 To $119 

Photo courtesy of Amazon.

Latest Ratings for AMZN

DateFirmActionFromTo
Sep 2018Wells FargoMaintainsOutperformOutperform
Sep 2018CitigroupMaintainsBuyBuy
Sep 2018DA DavidsonMaintainsBuyBuy

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Amazon Prime AWS cloud Gene Munster Loup VenturesAnalyst Color Analyst Ratings Best of Benzinga

 

Related Articles (AMZN)

View Comments and Join the Discussion!

AIG Notches Upgrade Ahead Of Q1 Report On Fundamental Improvements

Mid-Afternoon Market Update: eHealth Rises On Earnings Beat; Flex Shares Slide