Back to top

Amazon Acquires Ring to Bolster Home Security Portfolio

Read MoreHide Full Article

Reportedly, Amazon.com, Inc. (AMZN - Free Report) acquired Santa Monica, CA-based Ring, a well-known developer of internet connected video doorbell and camera devices. The deal will help Amazon expand in the home security market and improvise its in-house delivery services.

Ring’s doorbells with stick up cameras enable people to monitor properties and answer door calls from anywhere by talking or texting the person at the door via smartphone, tablet and PC.

Per Reuters, Ring’s devices are compatible with Amazon key, the company’s smart lock and camera system, which allow “delivery personnel put packages inside a home to avoid theft or, in the case of fresh food, spoiling.” The devices can also be integrated with Amazon’s voice-controlled digital assistant, Alexa.

Amazon is reportedly paying more than $1 billion for Ring, which has raised $443.9 million so far. Notably, Amazon’s Alexa fund has also invested in the startup.

Strategic Acquisitions: Key Catalyst

Acquisitions have played an important role in charting Amazon’s growth trajectory. According to Reuters, Ring is set to be the company’s “most expensive deal”, after Whole Foods acquisition.

The latest deal is in sync with the company’s focus on expanding its product portfolio for the home automation market.

According to data from marketsandmarkets.com, the global home automation system market is expected to reach $79.57 billion by 2022, a CAGR of 11.3% between 2016 and 2022. The increasing importance of remote home monitoring has been cited as one of the primary reasons behind this strong growth.

Amazon entered into home security market with the launch of Echo devices in November 2014. In December 2017, the company acquired Blink, a startup that offers wireless security cameras and doorbells. We note that the addition of Ring’s product further strengthens Amazon’s home security product offerings.

 

Amazon.com, Inc. Revenue (TTM)

 

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

 

Improving Competitiveness

Moreover, the increasing portfolio strength improves Amazon’s competitive position against the likes of Siemens and Alphabet (GOOGL - Free Report) division Google. Siemens is widely considered as the market leader in home automation & controls due to its diversified product offerings.

Also, Amazon’s aggressive penetration in the home security devices market doesn’t bode well for the likes of ADT Inc. (ADT - Free Report) and Alarm.com Holdings (ALRM - Free Report) .  

Following the news, shares of ADT and Alarm.com fell 4.53% and 1.04% on Feb 27, respectively.

Notably, Amazon shares have gained 78.9% in the past year, outperforming the industry’s rally of 54.2%.

 

 

Currently, Amazon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Amazon.com, Inc. (AMZN) - free report >>

Alphabet Inc. (GOOGL) - free report >>

Alarm.com Holdings, Inc. (ALRM) - free report >>

ADT Inc. (ADT) - free report >>

More from Zacks Analyst Blog

You May Like