Back to top

Analyst Blog

Amazon.com Inc. (AMZN - Analyst Report) has recently announced the launch of its new virtual wine marketplace, offering customers an opportunity to shop from a selection of more than 1000 domestic brands of wines.

Amazon Wine will feature selections from some of the big wineries in the United States, including Francis Ford Coppola, Hall, Mark Ryan, Eden Canyon, Pepper Bridge and Roadhouse. Additionally, the website will provide detailed information about individual wines, including their composition, alcohol content and American Viticultural Area (AVA).

Management stated that customers could order up to six bottles of wine for $9.99, without having to pay any shipping cost. Currently, the shipping service will be available in California, Connecticut, Florida, Idaho, Illinois, Iowa, Nebraska, Nevada, North Carolina, Oregon, Washington, Wyoming and the District of Columbia.

Amazon had tried to enter the virtual wine market a few years ago but could not take its plans ahead due to strict regulations governing the sale and delivery of alcohol across the U.S. state borders.

According to a study conducted by MarketResearch.com, the U.S. wine market is expected to touch $33.5 billion with 871 million gallons of wine sales by 2013. The study forecasts that wine shipments will expand at a compound annual growth rate (CAGR) of over 3% from 2010 to 2013.

Amazon is one of the leading players in the extremely fast-growing retail ecommerce market and its strength lies in its huge scale of offerings, its broad reach and platform approach. We believe the market leader should continue to grow as long as the market is expanding.

At the same time, we think that there is a certain amount of uncertainty regarding Amazon’s investment plans, which could pressure earnings in the near term.

At the moment, however, most of Amazon’s competition (whether direct or indirect) continues to come from eBay Inc. (EBAY - Analyst Report), Apple (AAPL - Analyst Report), Barnes & Noble, Inc. (BKS - Snapshot Report) and Google .

Currently, Amazon has a Zacks #4 Rank, which implies a Sell rating in the near term.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
CENTURY ALU… CENX 19.88 +5.74%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
THE PANTRY… PTRY 18.41 +2.79%