Amazon.com, Inc. (NASDAQ:AMZN) is no longer just an online commerce website. Amazon is ready to be disruptive.
Amazon in the News
On Wednesday at an event in Seattle, Amazon.com, Inc. (NASDAQ:AMZN) broke its own mold. The retail company announced its very own 3-D smartphone called the Fire Phone. CEO Jeff Bezos was excited to unveil the product, stating, “Can we build a better phone for Amazon Prime members? Well, I’m excited to tell you that the answer is yes.” The phone has an impressive 4.7-inch high-definition display, a 13 Megapixel camera and unlimited phone storage on Amazon’s Cloud Drive. Even before the phone was released, the rumors had analysts buzzing. And now that the phone is here, financial experts can’t seem to stop talking about Amazon.
What Does This Mean for Amazon’s Stock?
Before Amazon’s Fire Phone was revealed, SunTrust Robinson Humphrey analyst Robert Peck reiterated his BUY Amazon rating. In speculating about the impact of the phone Peck noted, “Assuming the middle scenario of 10% penetration, the company could sell 2.7m phones at a $400 assumed ASP to the carrier (not the consumer), driving ~$1b of lift from phone sales.” He also added that, “Lastly, we assume that each NEW customer buys 10 items per year at an ASP of $50, driving another ~$900m of revenue. In total, this scenario would drive >$2b revenue lift for Amazon, or a 2% lift off of Street consensus for 2015.” Peck has a +14.7% average return per recommendation and a 76% success rate recommending stocks.
After the major unveiling of the phone, top analyst Victor Anthony of Topeka Capital Markets also recommended BUY Amazon. Anthony noted, “The phone is impressive and compares favorably with other high-end smartphones on the market today. The features, such as Dynamic Perspective (3D), Firefly, MayDay, unlimited storage of photos, and one free year of Amazon Prime, are compelling and should help attract smartphone users, and possibly take share from other Android smartphone makers.” He also argued, “While Samsung (KRX:005930) and Apple Inc. (NASDAQ:AAPL) currently dominate the smartphone market, smartphone penetration globally hovers around 30%, leaving a wide open opportunity for a new entrant with a compelling and differentiated offering, which we believe AMZN introduced yesterday.” Anthony has a +19.6% average return per recommendation and a 68% success rate recommending stocks.
The smartphone world has been dominated by Apple and Samsung for some time, but these analysts see Amazon as becoming a disruptive player in the market.
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Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]