How Much Are Prime, Prime Video Worth For Amazon?

Amazon.com, Inc.'s AMZN Prime subscription service, which was conceptualized with the idea of retaining customer royalty, is slowing and steadily becoming a vital cog in the e-commerce giant's wheels, according to Needham. 

The Amazon Analyst: Laura Martin has a Buy rating on Amazon with a $3,700 price target. 

The Amazon Takeaways: Data from multiple independent data providers confirm accelerating consumer adoption of stream services, Martin said in a Monday note. (See her track record here.)

Amazon had 150 million Prime members as of January 2020 who are paying $119 per year, a 50% year-over-year increase the analyst said, citing company data.

Martin said she expects subscriber additions to accelerate further due to the COVID-19 pandemic. 

About 80% of subscribers pay for Prime primarily for free shipping, and the remaining 20% for media assets such as Prime Video, Twitch, music and reading, the analyst said, citing a Diffusion group survey.

Prime is priced comparably with Netflix Inc's NFLX at $9-$10 per month, she said.

Amazon loses less money than Netflix on its video subscriptions, Martin said. 

Amazon Prime is worth about $200 billion, or 12% of the company's total enterprise value, and Prime Video about $40 billion, or 2% of the enterprise value, according to Needham estimates. 

Amazon has several hidden multipliers to suggest it is worth between $4,500 and $5,000 per share, Martin said. 

AMZN Price Action: Amazon shares were higher by 1.09% at $3,182.41 at the close Monday. 

Related Links:

Apple Prepping Subscription Bundles To Boost Recurring Revenue: Report

RBC Lifts Amazon Price Target To Street-High $3,300, Says It's 'Best Global Play' On E-Commerce

Photo courtesy of Amazon. 

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsAmazon Primee-commerceLaura MartinNeedhamstreaming video
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!