The coronavirus pandemic induced lockdowns may have been a curse for most businesses, but one of the major winners from out of all this is e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN). The company has had to cater to the soaring demand for essential items from people who had stayed at home during the period.
AMZN Stock Outperformed
It has been reflected in the stock price as well, and the Amazon stock has gained 36% so far this year. However, that has made many analysts incredibly bullish about the stock, and Mark Mahaney of RBC Capital raised the price target for the stock to $3300.
Mahaney stated that Amazon is all set to emerge as a ‘structural winner’ and while he maintained his outperform rating, he bumped the target price to $3300 from $2700. According to a U.S. Online Shopping Survey conducted by the firm, the data indicates that the adoption of online shopping has decisively accelerated, and Amazon will be a major winner from that outcome.
In the first fiscal quarter, the company managed to generate revenues of $75.5 billion, which reflected the growth of 26% year on year. On top of that, Amazon’s operating income soared to $4 billion, while net income came in at $2.5 billion.
However, that is not all. The company’s Prime membership, which is worth $200 a year, also saw a significant rise this year. Mahaney revealed that the number of Prime members rose by 67% in 2020, which is significantly better than the 59% rise in 2019. It should be noted that data suggests that Prime members spend $1400 per year on average as opposed to other customers who spend $600 a year. All this has probably been noticed by the market as well, and the stock has hit new highs recently. It is now trading above $2500 a share. Considering the fact that e-commerce only made up 11.8% of total retail sales in the United States, there is still a lot of upside for Amazon.