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%.