Amazon Makes a Killing on Black Friday Despite Looming Economic Concerns

+13.37%
Upside
181
Market
205
Trefis
AMZN: Amazon logo
AMZN
Amazon

A grim global economic environment failed to deter shoppers as comScore reported that U.S. online shopping spend on Black Friday increased by around 26% to around $816 million. [1] The good news for Amazon (NASDAQ:AMZN) is that the company led the pack, showing the highest spending growth rate since the previous year. Amazon competes in the global e-commerce space with companies such as eBay (NASDAQ:EBAY).

See our full analysis for Amazon’s stock here


Kindle Fire Should Add to Cyber Monday Sales

An even bigger sales opportunity would beckon Amazon on Cyber Monday, which saw consumer spending cross $1 billion last year. [2] With the U.S. e-commerce holiday sales expected to grow by 17% n 2011, Amazon is also expected to push is hot offering, the Kindle Fire. While the tablet is already heavily discounted considering that it takes over $200 to build, [3] free one-month memberships on the Fire such as the Amazon Prime could act as a major incentive for users to drive Amazon’s e-commerce sales on Cyber Monday.

We have a revised price estimate of $233 for Amazon’s stock, which is currently around 28% above the current market price.

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Notes:
  1. comScore: Black Friday Boasts $816 million in U.S. Online Holiday Spending, Up 26 Percent vs. Year Ago []
  2. comScore: U.S. Online Holiday Shopping Season Reaches Record $32.6 Billion for November-December Period, Up 12 Percent vs. Year Ago []
  3. Kindle Fire costs $202 to build according to iSuppli teardown []