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On Thursday, Citizens JMP analysts maintained their Market Outperform rating and $240.00 price target for Amazon.com (NASDAQ:AMZN) stock, which currently trades at $185.92. With a market capitalization of $1.97 trillion and robust revenue growth of 11% over the last twelve months, Amazon continues to demonstrate its market dominance. According to InvestingPro analysis, the company maintains good financial health with strong cash flows to support major initiatives like Project Kuiper, its satellite internet venture. Nicholas Jones of Citizens JMP highlighted that Amazon has been investing approximately $2 billion annually since 2022 in satellite launches, which has influenced the company’s operating income margin.
According to Jones, these expenditures have had a 27 basis point impact on Amazon’s consolidated operating income margin in 2024. The total anticipated spending on Project Kuiper is projected to reach $7.4 billion, and while this spending is expected to continue into 2025, it is not a certainty that all satellites will be launched within the year as launch costs are typically prepaid. With a current P/E ratio of 32.82 and strong return on equity of 24%, Amazon appears well-positioned to handle these significant investments while maintaining its financial strength.
The report suggests that once Project Kuiper becomes commercially viable, Amazon may begin capitalizing ongoing maintenance costs, which would alleviate some pressure on operating income. Citizens JMP analysts predict that if Amazon follows a trajectory similar to Starlink, it might start generating revenue from Project Kuiper in the second half of 2026. This is a shift from the initial estimation of the second half of 2025. Based on InvestingPro’s Fair Value analysis, Amazon currently appears to be trading near its fair value, with analysts setting price targets ranging from $195 to $287.
The analysis also anticipates that Amazon will price its hardware and services competitively, likely below that of its competitors, to drive adoption. Consequently, Project Kuiper is expected to operate at a loss for the next few years. The full report includes detailed spending information, the impact on operating margins, and an updated mini-model for Project Kuiper.
In other recent news, Amazon.com has made its Bedrock Intelligent Prompt Routing generally available, offering a tool that enhances automated routing between large language models. This development allows users to direct requests efficiently, based on cost and response quality, and comes with improvements driven by customer feedback. On the financial front, Citi analysts have maintained a Buy rating on Amazon, with a price target of $225, showing optimism about the company’s performance despite challenges such as tariffs and economic conditions. They anticipate stable demand for Amazon Web Services (AWS) and expect the company to maintain its capital expenditure expectations. Meanwhile, Telsey Advisory Group has adjusted Amazon’s stock target to $235, down from $275, due to potential impacts from tariffs on consumer spending and operating costs, but continues to rate the stock as Outperform. Telsey highlights Amazon’s growth potential through online spending, merchandise assortment, and AWS services, despite caution over tariff uncertainties. The company also recently experienced a 1.1% decline in premarket trading amid uncertainties related to U.S.-China tariffs affecting the Magnificent Seven stocks.
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