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The Zacks Analyst Blog Highlights: AMZN, FDX, ZUMZ and FVRR

Zacks Equity Research

For Immediate Release

Chicago, IL –December 26, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amazon AMZN, FedEx FDX, Zumiez ZUMZ and Fiverr International FVRR.

Here are highlights from Tuesday’s Analyst Blog:

Amazon to Hike Merchant Fees in 2020 to Cover Rising Expenses

Amazon’s robust delivery services, which not only provide customers an enhanced shopping experience but also benefits sellers with increased reach and sales growth, are testament to its focus on e-commerce market.

Notably, the company has a huge third-party seller base and maintains a healthy relationship with them on the back of these services.  In 2019, the company has invested more than $15 billion in tools, infrastructure and Fulfillment by Amazon (FBA) program to help sellers.

However, the company has reportedly decided to hike merchant fees for warehousing and shipping goods by 3% on average in 2020. The hike will help in managing rising infrastructure costs incurred in a bid to provide fast delivery services.

Growing Prime Delivery Initiatives

Amazon introduced Prime Free One Day service this year, which remains a major positive. In fact, it has driven customer momentum significantly.

However, rising transportation and fulfillment center costs related to this service have been weighing on the company’s margins since past few quarters. These costs are expected to increase further.

Notably, this is one of the reasons behind investor skepticism regarding the stock.

Coming to the price performance, shares of Amazon have returned 19.4% on a year-to-date basis, underperforming the industry’s rally of 26.4%.

We believe raising merchant fees is likely to help Amazon in covering these costs.

Further, the company is of the opinion that 3% hike is a moderate one. Moreover, the hike is still below the industry standard, which highlights commitment toward sellers.

Additionally, Amazon has stated that referral fees for merchants will go down in some instances.

Amazon Prime: A Key Catalyst

We note that Prime members pay $119 per year for fast and free delivery.

The latest decision by Amazon reflects continued focus toward delivering goods on time despite rising transportation costs.

Apart from this move, the company has temporarily suspended the usage of FedEx’sground delivery network for its Prime shipments, in order to prevent delays in the delivery of the packages. Notably, the company is of the opinion that the network is slow and needs to speed up.

All these initiatives are likely to drive Prime membership further.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector that can be considered are Zumiez and Fiverr International. While Zumiez sports a Zacks Rank #1 (Strong Buy), Fiverr carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Zumiez and Fiverr International is pegged at 12% and 44.18%, respectively.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
 
FedEx Corporation (FDX) : Free Stock Analysis Report
 
Fiverr International Lt. (FVRR) : Free Stock Analysis Report
 
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