Amazon: Prime Day’s Success Bodes Well for Q4, Says 5-Star Analyst

Amazon (AMZN) hosted its annual Prime Day event last week, and although it has yet to release overall sales, Truist analyst Youssef Squali believes the available data indicates this year’s event “was a record sales period again for the company.”

The sales data so far shows 3P (third party) vendors experienced robust growth. The platform’s marketplace sellers - made up mostly of small-to medium sized businesses - saw year-over-year sales increasing by 60% to $3.5 billion across 19 different countries, beating Amazon’s 1P business.

As a side note, with e-commerce surging across the globe, the pandemic appears to have boosted the amount of 3P sellers on Amazon. “We note that 3rd party unit sales have accounted for 52% of worldwide paid units in 1H20,” Squali said.

Overall, Amazon believes consumers saved over $1.4 billion from the Prime Day discount bonanza.

Like in previous years, Amazon’s own Alexa powered hardware devices, such as the Echo Dot, Fire TV Stick 4K and Alexa Voice Remote, along with various 3P devices using Alexa, were highlighted as some of the event’s top selling products.

“Given that Alexa is a core part of Amazon's strategy of creating a deeper and stickier relationship with consumers,” the 5-star analyst said, “We believe the continuation of this trend pays dividends over a long period.”

What it all boils down to, says Squali, is that the event’s success suggests Amazon will post strong results in the fourth quarter.

“As we noted in our preview of Prime Day, eMarketer was estimating 2020 Prime Day to have sales growth of 43% y/y to $9.91B. While still early, but with 60% y/y growth in 3P sales, and accounting for most of the revenue, we believe this performance bodes well for Amazon's 4Q20 results, which consensus estimates peg at ~28% Y/Y growth today,” Squali summed up.

All in all, there’s no change to Squali’s rating which stays a Buy, and so does the $3,600 price target. Investors are looking at upside of 12% from current levels, should Squali’s target be met over the next month. (To watch Squali’s track record, click here)

AMZN's Strong Buy consensus rating is based on Buys only - 38, as it happens. The average price target clocks in at $3,758 and implies shares will rise by 17% from current levels. (See Amazon stock analysis on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos


    TipRanks is the most comprehensive data set of sell side analysts and hedge fund managers. TipRanks' multi-award winning platform ranks financial experts based on measured performance and the accuracy of their predictions so investors know who to trust when making investment decisions.

    Learn More