Analysts predict the number of Amazon Prime subscribers will more than double in the next decade rising from 101 million at the end of 2017 up to 275 million.
Citigroup analysts say “Prime members are growing 35% to 40% per annum” with analyst Mark May raising his 12 month price target for the company by 15%. The analysts also said they believe Wall Street does not fully appreciate the value of the online retailer, adding that the company could make $500bn from Prime sales per year in the next decade.
In a statement, May said: “We remain positive on Amazon shares and view Amazon’s large and growing global Prime member base as not only a source of recurring revenue but a key reason why brands and third-party sellers are increasingly relying on Amazon’s marketplace.
“Prime members are growing 35% to 40% per annum. There are many benefits of having highly satisfied membership-based customers, but a simple metric is that most studies suggest Prime members spend twice as much as non-Prime members.”
Despite hefty predictions Amazon’s stock fell by 0.67% when trade opened on Monday, this year has seen shares in the retailer rise by 65.8% so far, bringing the total share price rise in the company for the last 12 months over 100%.