Amazon’s stock has smashed the S&P 500 in terms of performance this year, climbing 39% year to date while the index has only climbed 2% this year. Three main factors drove the stock’s outperformance. For one thing, management has become more constructive on the company’s margins.

Second, there’s the fact that Amazon Web Services has become a major revenue generator. And third, Amazon has managed to post solid results in spite of the currency headwinds that have been plaguing U.S.-based companies over the last several quarters.

Amazon.com, Inc. Price Target Upped At Canaccord Genuity

Remaining Hold-rated on Amazon

So what’s next for Amazon? Shares could move higher, although Canaccord Genuity analysts think the stock’s growth may start tapering off.

In a report dated June 15, analysts Michael Graham, Austin Moldow and Ryan Wallace reiterated their Hold rating on Amazon but raised their price target from $380 to $400 per share. They admit that they missed this year’s huge share price move, but they think the sudden explosion in the price will come to an end.

Why shares may not move higher

The Canaccord Genuity team again looked at the main drivers of Amazon’s margins. They think the online-retailer remains “in investment mode.” They expect the recent rapid growth of gross profits compared to revenues will “moderate slightly.” Further, they note that the international expansion continues to place pressure on Amazon’s e-commerce margins.

This year they estimate that Amazon’s revenue will grow 16%, compared to last year’s 20%. For next year, they expect a slight reacceleration of revenue growth to 18%.

In terms of margins, the analysts think consensus estimates is about 100 basis points higher than their estimates. They say consensus estimates suggest that Amazon’s margins, as other firms have upped their margin estimates for Amazon over the last couple of quarters.

Other segments

Amazon has grown to be much more than an online retailer, although e-commerce remains its core business. The Canaccord Genuity team segments the company into five major divisions: first-party, third-party non-fulfillment by Amazon, third-party fulfillment by Amazon, Amazon Web Services and other.

They estimate that sales from third-party fulfillment by Amazon bring a take rate of 29%, while non-fulfillment brings a 13% take rate. They estimate more than $15 billion in revenue from Amazon Web Services by 2018 and an expanded operating margin for the segment to about 22%. They also believe that if the segment was a separate company, it would be worth about $35 billion.

As of this writing, shares of Amazon were down 1.55% at $423.27 per share.