If Amazon Prime Day comes back in the fall, it could be a sales win for Amazon: analyst
If Amazon (AMZN) pulls the trigger on a second Prime Day in the fall, it could haul in some major sales for the tech beast.
Jefferies analyst Brent Thill estimated in a new research note Monday that Amazon could ring up $11.1 billion in gross merchandise value (GMV) and $8.1 billion in sales if the company has another Prime Day during the holiday shopping season. Thill cites media reports for modeling out the top line potential of a second Prime Day for Amazon.
Under this dual Prime Day scenario, Amazon would register an eye-popping $20.6 billion in gross merchandise value and $14.9 billion in sales.
The two-day Amazon Prime Day kicked off on Monday for Prime members in 22 countries with numerous deals on the online retailer's website. This year's event is four months earlier than last year's as Amazon moved the event to October in light of the COVID-19 pandemic.
Thill estimates Amazon generated $10 billion in GMV last year.
The analyst maintained his Buy rating on Amazon's stock and $4,200 price target, representing about 20% from current price levels.
"Amazon trades at a ~10% discount to its historical average EV/EBITDA multiple, despite a fundamental outlook that is arguably better than ever given behavioral changes incited by the pandemic that have resulted in a permanent increase in e-commerce adoption. We also see attractive growth at AWS and advertising, Amazon's two highest margin businesses, serving to more than offset any near-term slowdown in core retail resulting from difficult comparisons," Thill says.
A strong Prime Day this month would go a long way to reigniting Amazon's stock.
Amazon shares are up 7.1% year-to-date, underperforming the Nasdaq Composite's 9% gain. Pros have suggested the stock is being pressured a bit ahead of founder and CEO Jeff Bezos stepping down as the tech giant's leader on July 5.
Taking his place will be long-time right hand man Andy Jassy, currently CEO of Amazon Web Services. Jassy joined after Amazon’s IPO in 1997 and has built the AWS business up from the ground floor over nearly two decades.
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Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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