Amazon's Growth Potential is "Undeniable"

Even with more retailers moving sales online, equity analysts believe Amazon will maintain its consumer proposition through other means

R.J. Hottovy, CFA 1 November, 2016 | 8:48AM

Amazon (AMZN) has played a key role in the structural shift away from brick-and-mortar retail, and it may lay waste to many other retailers in the years to come. Without the cost burden of physical stores, Amazon can price below traditional rivals and drive recurring traffic online.

Amazon faces questions about monetising its growth

Even with more retailers moving sales online, we believe Amazon will maintain its consumer proposition through other means, including the convenience of Amazon Prime's expedited shipping and expanding digital-content library. Aided by the network effect inherent in more than 300 million global active users and recent fulfilment infrastructure, technology, and content investments, Amazon owns one of the wider economic moats in the consumer sector and is likely to remain a disruptive force in retail, digital media, and enterprise software.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amazon.com Inc2,960.47 USD0.19

About Author

R.J. Hottovy, CFA  is a director of equity analysis with Morningstar.

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