Home > Boards > US Listed > Internet - E-Commerce > Amazon (AMZN)
Followed By 634
Posts 96849
Boards Moderated 48
Alias Born 03/10/2004

Tuesday, April 13, 2021 8:22:09 PM

Re: None

Post# of 10377
Amazon stock may be 70% undervalued and the company worth $3 trillion: analyst
By: Yahoo Finance | April 13, 2021

Long-time tech analyst Brent Thill has crunched the numbers on Amazon, and could make a strong case on the tech giant being 70% undervalued at current valuation levels.

Or looked at a different way, the company could someday have a market cap of $3 trillion as opposed to the $1.72 trillion it sports today.

"Our sum-of-the-parts analysis shows ~70% upside over the next three years [for Amazon], driven by Amazon Web Services and Advertising. This implies Amazon's market cap approaches $3.0 trillion by 2024 and this does not include potentially meaningful contributions from multi-billion dollar opportunities in health care, home security, smart-home devices, and entertainment. The company also has room for further expansion in areas such as apparel, B2B [business-to-business], and SaaS [software-as-a-service]," Thill wrote in a new research note.

Thill says his sum-of the parts analysis warrants a $5,700 stock price for Amazon. But he is quick to note his price target remains $4,000 with a Buy rating, despite the pathway to larger gains for the stock.

"Our sum-of-the-parts analysis is purely illustrative and does not reflect our official price target. We believe evaluating Amazon over a longer period (based on 2024 estimates) helps provide perspective in the face of near-term disruptions/volatility from the pandemic. We also see Amazon's discount to its sum-of-the-parts narrowing over time, making it a good indicator of long-term valuation. Note we are not attributing any value to Amazon health care initiative, which is addressing $350 billion in U.S. Rx spending and could help increase engagement/frequency among existing users while also helping attract additional Prime members," explains Thill.

Amazon shares rose slightly to $3,428 on Tuesday's session.

To be sure, Amazon's stock this year hasn't traded anything like one on a collision course with a $5,700 price. Year-to-date, Amazon shares are up 5%, versus a 10% gain on the S&P 500 and 8% pop on the Nasdaq Composite. It's the third worst-performing component of the closely watched FAANG index (Facebook, Amazon, Apple, Netflix and Google) of tech giants — Apple shares are up modestly on the year while Netflix has gained 2%.

The tepid action in Amazon reflects concern among analysts of slowing growth in 2021 after a surge in business in 2020 during the onset of the pandemic. But Wall Street analysts such as Thill have out in defense of Amazon in the lead-up to its first quarter earnings release. Their collective argument: business is still pretty darn good for Amazon.

"While the company will be up against difficult top-line comparisons in coming quarters, we see a favorable backdrop for shares through the balance of 2021 as 1) top-line growth rates are likely to remain robust (in the 20% range, by our estimates), 2) AWS and cloud computing trends remain strong, and 3) profitability gains materialize as high-margin business segments scale further and as Amazon laps heavy investment made in 2020 (including COVID-related spend and fulfillment center expansion)," Guggenheim analyst Robert Drbul said in a note earlier this month.

Like Thill, Drbul has a $4,000 price target on Amazon's stock.

Read Full Story »»»

Recent AMZN News

FEATURED Electromedical Technologies Announces Financial and Operational Highlights for the Three and Six Months Ended June 30, 2022 Aug 18, 2022 7:12 AM

KINETIC GROUP, INC. (OTC:KNIT) Retains International Monetary for Investor Relations, Capital Formation, and Other Strategic Services KNIT Aug 18, 2022 9:00 AM

CYIOS Corp 's (OTC: CYIO) Immortals Group Forms Partnership with MARVELOUS NFT's, Developer of the Highly Acclaimed Bad Days Super-Hero Play to Earn NFT Game CYIO Aug 18, 2022 8:30 AM

GBT is seeking to develop application specific AI models for its Motion Detection Wireless technology GTCH Aug 18, 2022 8:05 AM

PSYC Appoints COO for Wholly Owned Subsidiary, Spotlight Media Corp. PSYC Aug 17, 2022 8:30 AM

ResGreen Group Adds Wireless Stacklights to its Line-Up of Industrial Automation Devices RGGI Aug 17, 2022 7:41 AM

GBT Filed a Non-Provisional Patent Application Seeking to Protect the Automatic Correction of Integrated Circuits Connectivity Mismatches GTCH Aug 16, 2022 4:56 PM

InnerScope Hearing Technologies (OTC: INND) Announces FDA Has Released The Final Rule For OTC Hearing Aids INND Aug 16, 2022 11:29 AM

FDCTech's Quarterly Release for the Second Quarter (FY22 Q2) Results FDCT Aug 16, 2022 9:42 AM

Fastbase (OTC:FBSE) Explodes Data Research Space FBSE Aug 16, 2022 9:15 AM

WaterPure International Inc (OTCMKTS: WPUR) Heating Up after Co Announces it is Exploring Multiple Merger & Acquisition Opportunities INTK Aug 16, 2022 9:00 AM

PSYC Enters MOU to Acquire Technical420, LLC for $2.25M in Accretive Transaction PSYC Aug 16, 2022 8:30 AM

Branded Legacy, Inc. Announces Removal of "Yield" Sign on OTC Markets Stock Quotes BLEG Aug 16, 2022 8:30 AM

HealthLynked Reports Second Quarter 2022 Results HLYK Aug 16, 2022 8:00 AM

XCPCNL Business Services Announces Signing of Reverse Merger Acquisition Agreements with Centiment Capital Holdings XCPL Aug 16, 2022 7:15 AM

Day Range:
Last Trade Time:
Total Trades:
  • 1D
  • 1M
  • 2M
  • 3M
  • 6M
  • 1Y
  • 2Y
  • 3Y
  • 5Y