Amazon is likely to hit $100 billion in annual revenue and is on a growth path that eclipses the world's most successful retailer---Wal-Mart.
That revenue projection comes from Morgan Stanley analyst Scott Devitt. In a large research report that emphasized that Amazon has plenty of runway left for growth, Devitt made the following points:
- Amazon can fuel growth just by taking wallet share from its existing customers. Amazon's 121 million customers spend about $275 a year. Wal-Mart's 300 million customers spend $750 a year excluding groceries and Sam's Club.
- International expansion continues.
- New efforts such as Amazon Web Services and digital sales via the Kindle platform are promising.
- Subscription e-commerce for grocery staples is another promising avenue. I've been experimenting with subscription groceries for things like tea and cereal. Overall, Amazon's pricing needs to come down a bit vs. Wal-Mart---based on my informal Dignan Go Lean and Frosted Flakes cereal index---but scale should help that.
Here's the money chart via Morgan Stanley.
Other odds and ends from analysts upbeat about Amazon.
- Jefferies analyst Youssef Squali reckons that Amazon sold 4 million Kindles in the fourth quarter. Amazon should move about 10 million Kindle devices in 2011.
- E-books should generate $184 million in sales for the fourth quarter, said Squali.
- Fulfillment center expansion at Amazon has focused on dry packaged goods and home and garden. These untapped categories can fuel growth in upcoming years, said Squali.
- Based on Amazon's fourth quarter actual peak orders, which were up 44 percent from a year ago, Amazon's revenue should be about $13.05 billion, said Piper Jaffray analyst Gene Munster.