Amazon (AMZN) shares clocked an all-time high last week by reaching $2,722.35. According to Needham analyst Laura Martin, that milestone will soon be left in the dust as the all-conquering Amazon is heading towards $3,200.
As it happens, $3,200 is only Martin’s short-term goal. Over time, Martin reckons Amazon stock could be worth up to $5,000 per share, based on what the 5-star analyst calls “Amazon’s hidden value multiplier.”
There are several of these. One is a TAM (total addressable market) expansion multiplier, based on “AMZN’s track record of TAM-expanding decisions that elongate its growth runway, drive higher profitability, and lower shareholder risk via revenue-stream diversification.”
This comes down to Amazon’s knack for adding “enormous” new markets, or “areas of investment” that could not be seen “3-5 years prior to the investments.”
Another aspect of Martin’s bullish thesis concerns the way we view Amazon. Referring to the giant as merely an e-commerce company, whose focus is online retail, is a fallacy. Dig a little deeper and Amazon is, in fact, a services company.
Source: Yahoo Finance (2020)