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Over the last one year, the stock has outperformed the Zacks Internet Commerce industry. It has returned 29.31% compared with the industry’s return of 25.38%.
Amazon Prime Rewards Visa Signature Card underscores the company’s continuous push to extend advantages exclusively to Prime members
One Card Many Benefits
This card offers 5% back on all Amazon.com purchases, 2% back at restaurants, drugstores and gas stations and 1% back on all other purchases. There is no cap on rewards earned, no expiry of rewards, no foreign transaction fees for cross-border travel and shopping, zero annual fee or fraud liability, travel and purchase protection benefits and 24/7 concierge service through Visa Signature.
With a look similar to Chase’s famous Sapphire cards, the new metal card awards a dollar against every 100 points that are redeemable upon reaching 2,000 points.
Combining the Best
Amazon already has two cards that offer similar benefits. The Prime Store Card offers 5% back but exclusively on Amazon purchases (not a regular credit card). The Amazon rewards Visa is a credit card but offers 3% back. The new card combines the benefits of these two cards to encourage Prime members to spend more and lure more users to the program.
Prime memberships help in repeat sales of not just general merchandise but also media (books, music, video, etc). Prime members spend double the amount spent by non-prime members.
Bottom Line to Take a Hit
We expect the heavy investments to weigh on Amazon’s bottom line through 2017 and moves like these indicate that the company is going that way. (Read more: Is Amazon's Rally Over or Will the Stock Rebound in 2017?). The benefits are undoubtedly a good tactic to get more people to Prime and generate increased sales for Amazon but these will likely put pressure on the company’s bottom line.
Prime’s saturation in the U.S. market is apparent as Amazon has very high penetration rates in the country. This led management to announce a tiered pricing system, wherein users can try out a monthly subscription if they are unsure about the program or don’t want to pay upfront for the whole year. This plan brings flexibility to the pricing system and therefore is likely to remain in place. It should also increase penetration among the less affluent households. Just how much of an effect it has on the business is something we’ll have to wait and see (and also hope Amazon enlightens us about).
Zacks Rank and Stocks to Consider
Currently, Amazon is a Zacks Rank #4 (Sell) stock.
For the current year, the consensus estimate for Daktronics has increased 45.5% in the past 60 days.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Amazon Offers Chase Credit Card Intended for Prime Members
Amazon.com, Inc. (AMZN - Free Report) has announced a new Prime exclusive Visa (V - Free Report) card in collaboration with JPMorgan Chase (JPM - Free Report) .
Over the last one year, the stock has outperformed the Zacks Internet Commerce industry. It has returned 29.31% compared with the industry’s return of 25.38%.
Amazon Prime Rewards Visa Signature Card underscores the company’s continuous push to extend advantages exclusively to Prime members
One Card Many Benefits
This card offers 5% back on all Amazon.com purchases, 2% back at restaurants, drugstores and gas stations and 1% back on all other purchases. There is no cap on rewards earned, no expiry of rewards, no foreign transaction fees for cross-border travel and shopping, zero annual fee or fraud liability, travel and purchase protection benefits and 24/7 concierge service through Visa Signature.
With a look similar to Chase’s famous Sapphire cards, the new metal card awards a dollar against every 100 points that are redeemable upon reaching 2,000 points.
Combining the Best
Amazon already has two cards that offer similar benefits. The Prime Store Card offers 5% back but exclusively on Amazon purchases (not a regular credit card). The Amazon rewards Visa is a credit card but offers 3% back. The new card combines the benefits of these two cards to encourage Prime members to spend more and lure more users to the program.
Prime memberships help in repeat sales of not just general merchandise but also media (books, music, video, etc). Prime members spend double the amount spent by non-prime members.
Bottom Line to Take a Hit
We expect the heavy investments to weigh on Amazon’s bottom line through 2017 and moves like these indicate that the company is going that way. (Read more: Is Amazon's Rally Over or Will the Stock Rebound in 2017?). The benefits are undoubtedly a good tactic to get more people to Prime and generate increased sales for Amazon but these will likely put pressure on the company’s bottom line.
Amazon.com, Inc. Total Expenses (TTM)
Amazon.com, Inc. Total Expenses (TTM) | Amazon.com, Inc. Quote
Prime Saturation in the U.S.
Prime’s saturation in the U.S. market is apparent as Amazon has very high penetration rates in the country. This led management to announce a tiered pricing system, wherein users can try out a monthly subscription if they are unsure about the program or don’t want to pay upfront for the whole year. This plan brings flexibility to the pricing system and therefore is likely to remain in place. It should also increase penetration among the less affluent households. Just how much of an effect it has on the business is something we’ll have to wait and see (and also hope Amazon enlightens us about).
Zacks Rank and Stocks to Consider
Currently, Amazon is a Zacks Rank #4 (Sell) stock.
A better-ranked stock in the broader technology sector is Daktronics Inc. (DAKT - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, the consensus estimate for Daktronics has increased 45.5% in the past 60 days.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>