Wedbush Maintains Amazon (AMZN) at Neutral; 2013 Holiday Sales Impressive, But Roadmap Needed

Wedbush maintains its Neutral rating and $330 price target on Amazon.com (Nasdaq: AMZN) following the company's sales update today.

Analyst Michael Pachter noted that Amazon reported adding over 1 million Prime customers this holiday season. While Amazon isn't firm on its numbers, Pachter thinks the number could be above 20 million globally. He commented, This is slightly ahead of the 18 million global Prime members we modeled at the end of September, and suggests to us that Prime membership growth will accelerate in the coming quarters on a year-over-year basis.

Amazon also reported selling millions of Kindle e-Readers and tablets. Pachter said, The Kindle Fire HD, HDX 7” and HDX 8.9” were the bestselling tablets on Amazon.com this season. We believe Amazon Prime attach rate to Kindle sales are significant as the benefits of Prime to Kindle owners continues to grow with the Kindle Owners’ Lending Library offering more than 475,000 books that Kindle owners with Prime can borrow for free.

On maintaining his Neutral rating, Pachter said Amazon is unlikely to provide investors with a strategy roadmap. We are not convinced that the company will share sufficient details about spending plans to allow us to accurately model profit growth, and it could be a long time before EPS grows sufficiently to justify its share price, the analyst said.

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 $399.20 Tuesday, with a 52 week range of $242.75 to $405.00.

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