Amazon.com Inc. AMZN announced plans to open a new fulfillment center in Newnan, south of Atlanta, in order to meet the growing demand in the online shopping space.
The company has been spending heavily on new fulfillment centers over the past few years. Fulfillment centers are giant warehouses that help online retailers store and ship products, as well as handle returns quickly. These are important for providing the level of service that customers have started expecting from Amazon.
According to the company, the new facility will span more than 1 million square foot and is expected to create 500+jobs.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Warehouse Expansion Continues
The online retailer is on a construction spree to expand shipping footprint.
In July, the company had announced that it would build a warehouse in Gwinnett County, as part of expansion plans. The facility is expected to create more than 1000 jobs.
To date, the company operates more than 75 fulfillment centers in North America that employ in excess of 125,000 people, including 3,500 in Georgia.
The firm continues to hire manpower to meet growing customer demand. It has been increasingly pouring cash to build and modernize fulfillment centers, mainly to cut shipping costs and speed up delivery.
Amazon has been strengthening presence all over the world.
In our view, the company must maintain its U.S. market share while expanding globally, in order to retain the leading position. To this end, it needs to invest more in fulfillment, technology and content, especially in international markets with less penetration and higher growth rates.
Although increased expenses may hurt Amazon’s bottom line in the near term, we believe that this is necessary to maintain its dominance in this highly competitive market.
Zacks Rank & Stocks to Consider
Currently, Amazon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Alphabet Inc. GOOGL, Itron, Inc. ITRI and MACOM Technology Solutions Holdings, Inc. MTSI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Alphabet, Itron and MACOM Technology is currently projected at 17.5%, 25% and 15%, respectively.
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