Amazon (AMZN) Uniquely Positioned for Local Services, Baird Says

Baird analyst Colin Sebastian weighed in on Amazon.com (NASDAQ: AMZN) amid a Wall Street Journal article spotlighting the recent roll-out of Amazon Local Services.

"We believe Amazon's service should appeal to users browsing for local services or shopping for products that need servicing," Sebastian commented. "To-date, Amazon has launched in 15 metro areas, including Atlanta, Houston, Los Angeles, Miami, New York, San Antonio and San Francisco. Amazon is offering access to local professionals in Home Repair & Services, Automotive Services, Lawn & Garden, Computer & Electronics categories."

The analyst notes Amazon is distinguishing its service from other platforms that offer advertising or leads, rather than actual scheduled jobs. Amazon allows service providers to set prices and only pay a revenue share to Amazon for completed work. Currently, Amazon charges 20% commission to service providers on fees of up to $1,000, with a 15% commission on the portion of fees greater than $1,000.

The analyst notes Amazon's service listings include ratings and reviews from Yelp (NYSE: YELP), although they expect that over time Amazon will aggregate more of its own user generated content.

Home services is an estimated $400B global industry and the firm views Amazon as uniquely positioned given its leading position in e-commerce and ability to geo-target traffic to local service professionals.

The firm maintained an Outperform rating and price target of $340 on AMZN.

For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.

Shares of Amazon.com closed at $335.64 yesterday.

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