Amazon.com, Inc. (Nasdaq: AMZN) stock jumped nearly 2 percent higher Thursday after the company surprised Wall Street by reporting that Amazon Prime has reached 100 million subscribers. In his annual letter to shareholders, Amazon CEO Jeff Bezos updates investors on a number of key milestones, but analysts say the Prime subscriber count was the most bullish of all.
Thirteen years after Amazon launched its Prime membership service, Bezos reports that Amazon now has 100 million members after adding more members in 2017 than any other year. Amazon says it shipped a total of more than 5 billion global items last year.
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In addition to the Prime count, Amazon says the number of Amazon Web Services active users was up 250 percent in 2017. AWS now has a $20 billion annual revenue run rate.
For the first time, Amazon reported that more than half of its online marketplace unit sales came from third-party sellers.
Amazon also says 2017 was its best year ever for hardware sales, including “tens of millions” of Echo family devices, which were Amazon’s best-selling products of the year.
Amazon also says it created more than 130,000 new jobs in 2017. The company has been blamed for job losses associated with a record number of brick-and-mortar retail bankruptcies in recent quarters, including Toys R Us, Payless and Rue21.
Looking ahead, Bezos says Amazon will remain focused on its core values.
“We continue to aspire to be Earth’s most customer-centric company, and we recognize this to be no small or easy challenge,” Bezos says.
GBH Insights head of technology research Daniel Ives says Amazon’s 100 million Prime member count was a surprise. “This is a very bullish data point which speaks to how powerful the Prime membership machine has become over the years, as Amazon further expands its competitive moat and is on pace to own roughly half of US e-commerce spending by 2019 based on our estimates,” Ives says.
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He says consensus estimates of the Prime member count were around 80 million, but the actual number even exceeded his optimistic 92 million estimate.
“Bezos and Co. has built a Prime membership behemoth that we estimate is poised to increase spending another 20 percent this year and is on a stronger-than-expected organic growth pace for 2018,” Ives says.
GBH Insights has a “highly attractive” rating and $1,850 price target for AMZN stock.
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Amazon.com, Inc. (AMZN) Tops 100 Million Prime Members originally appeared on usnews.com
