Inside the Analyst Move
The analyst noted: “Amazon is our top large cap pick for 2015. Our recommendation is based on our belief that while investors may not get a nirvana margin moment in 2015, they will become increasingly confident that the business will scale longer term. We believe this increased understanding in the defensibility of Amazon’s marketplace, growth potential, and margin opportunity will move shares of AMZN higher in 2015. Longer-term (year plus), we believe margins can improve significantly (from 1% to 6%+ PF operating margin), driven by improvements in eCommerce margins, growth of AWS, and growth in other, high-margin businesses (advertising, local, and potentially travel).”
Ambitious Analyst Call
On the upside, many analysts and investors are excited about the company’s Amazon Web Services (AWS), which could have some potential value that can be unlocked.
Investors should realize that this stock is for aggressive investors. Investors seeking exposure to the company may be better off with a mutual fund.
Mutual Funds to Watch
|VTSMX||Vanguard Total Stock Market Index||1.33%|
|PRGFX||T. Rowe Price Growth Stock||1.11%|
The Bottom Line
Shares of Amazon are down 25% YTD.
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