Kindle Cloud Enables Readers to Access Kindle Library on Any Device

November 9th, 2011 by Trefis Team
+2.07%
Upside
225
Market
230
Trefis
AMZN: Amazon.com logo
AMZN
Amazon.com

Despite the margin squeeze in Q3 2011, Amazon (NASDAQ:AMZN) is continuing to pursue e-content growth at an aggressive pace. Recent initiatives include an extension of Kindle Reader’s reach into the Firefox Browser and Apple’s (NASDAQ:AAPL) iPad, [1] and a further expansion of Amazon’s Prime Instant videos through a licensing agreement with Disney-ABC Television Group. [2] We remain bullish on Amazon’s stock as the Kindle Fire provides the company with a clear way to build scale quickly.

See our full analysis for Amazon’s stock here

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Amazon’s Long-Term Investments Not Stopping Just Yet

With the recent Disney-ABC agreement, the deal promises to add further meat to Amazon’s 13,000 movies and TV shows on Prime Instant Video. This unabated content expansion is also an added incentive for users to purchase the Kindle Fire, given that they avail a free one-month membership for the Amazon Prime service. While online streaming rivals Netflix (NASDAQ:NFLX) are following a similar path to grow their content, Amazon’s extensive range of viewing platforms like the Kindle Fire could certainly give it an edge.

We have a revised price estimate of $233 for Amazon’s stock, which is currently around 10% above the current market price. We have maintained our estimates despite a difficult business environment as we believe the expected sales from merchandise and media should offset the decline in operating margin forecasts.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Amazon Press Releases: Kindle Cloud Reader Now Available on Mozilla Firefox [↩]
  2. Amazon Press Releases: Amazon Adds More Titles to Prime Instant Video with a New Digital Video Licensing Agreement with Disney-ABC Television Group [↩]