Zhitong Financial APP learned that Needham analyst Laura Martin said that Amazon.Com Inc (AMZN.US) has recently made a large investment to expand its product content base, and she believes Amazon.Com Inc will continue to expand profitability and market share in a number of areas, including e-commerce and Amazon.Com Inc Web Services cloud computing services, as well as its streaming platform Prime Video and live streaming platform Twitch. Therefore, Martin gave Amazon.Com Inc a "buy" rating, with a target price of $4150.
Martin believes that Amazon.Com Inc's current value far exceeds its value as just an e-commerce and cloud computing services company. Amazon.Com Inc's media assets are worth about $920 billion, equivalent to 53 per cent of Amazon.Com Inc's enterprise value, she says. Martin lists three Prime Video-related investments made by Amazon.Com Inc in 2021. Amazon.Com Inc has reached an agreement with NFL to host Thursday night's competition over the next 11 years, with a total amount of US $11 billion. Amazon.Com Inc also bought the exclusive content rights for Lord of the Rings for $465 million and will create the Lord of the Rings series. Some time ago, Amazon.Com Inc announced in a high profile that he would buy MGM Studios for $8.45 billion. Martin believes that the main reason for the company to spend a lot of money is to improve the competitiveness of giants such as Prime Video and Netflix Inc (NFLX.US) in the increasingly competitive streaming war, and further expand the streaming market share. Amazon.Com Inc Prime Video is not only a profitable enterprise, but also further promotes Amazon.Com Inc's e-commerce business by attracting consumers to join its ecosystem and enhancing the attractiveness of the brand. Compared with Netflix Inc, Prime Video's business model is more promising. The subscription cost of Prime Video is much lower than that of Netflix Inc, and the number of movies in the content library is almost four times that of Netflix Inc. " Martin added.
In addition, Martin believes that game streaming and video game live streaming platform Twitch is the "most undervalued" media asset in Amazon.Com Inc Group. Due to the epidemic, the number of users and participation of Twitch have increased, and now it occupies a dominant position in the field of live video games. Martin expects Twitch's revenue to grow 20 per cent year-on-year from 2020. Twitch also connects game developers to Amazon.Com Inc's ecosystem by bundling Amazon.Com Inc's Web Services server. Martin said that although Twitch currently accounts for only about 1 per cent of Amazon.Com Inc's enterprise value, with the continued growth of the industry, the future development potential of Twitch is inestimable.
Other Wall Street analysts currently have a consensus rating of "strong buy", with an average target price of $4295.17, meaning there is about 33.26% upside potential at the current price level.