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Indra Bhattacharjee's Avatar
published in Blogs
May 31, 2019

Amazon’s (AMZN, $1,778.39) ‘Merch’ is the new tidal wave for the apparel industry

Against the backdrop of rising uncertainty and high expenses attached to global supply chains, apparel brands’ real challenge now is to get their merchandise closer to the point of sale.

Amazon Inc’s t-shirt printing service currently seems to be the go-to solution for many of them. Entertainment companies like Walt Disney (DIS) and Dr. Seuss are increasingly turning to Amazon’s platform are following this strategy where instead of approaching traditional stores, they are working by on-demand printing T-shirts that do not warrant wide distribution. They can now list overnight on Amazon all the merchandise on sale and then post booking they are ready to make it and ship it. This completely cuts out that whole traditional supply chains cost.

The benefit is mutual, as Amazon also gets to become a major player in the clothing industry in the process. When garments are produced on-demand, it prevents the pile-up of unsold products allowing brands to sell more stock at full price.

This format is called ‘Merch’ by Amazon that rids brands and content creators of maintaining an up-front inventory.

This model has succeeded in bringing royalty revenue from sales of licensed merchandise and services globally to $14.5 billion last year, up 2.6% from 2017.

For example, Dr. Seuss helps Amazon with design, but Amazon sources the clothing and handles the sales and distribution. Dr. Seuss Enterprises has increased sales through ‘Merch’ by 40% since opening its store on the site around 18 months ago. The on-demand service also allows brands to give frequent design updates and offer secondary characters that may not be available in traditional stores.

Beyond the United States, Amazon has launched a ‘Merch’ printing facility in Poland in mid-2018 that serves the British and German markets.

Related Ticker: AMZN

Momentum Indicator for AMZN turns positive, indicating new upward trend

AMZN saw its Momentum Indicator move above the 0 level on May 09, 2023. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 80 similar instances where the indicator turned positive. In of the 80 cases, the stock moved higher in the following days. The odds of a move higher are at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Moving Average Convergence Divergence (MACD) for AMZN just turned positive on May 10, 2023. Looking at past instances where AMZN's MACD turned positive, the stock continued to rise in of 43 cases over the following month. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AMZN advanced for three days, in of 340 cases, the price rose further within the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 260 cases where AMZN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMZN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

AMZN broke above its upper Bollinger Band on May 10, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AMZN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 95, placing this stock slightly better than average.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (8.251) is normal, around the industry mean (18.902). AMZN's P/E Ratio (294.118) is considerably higher than the industry average of (73.102). Projected Growth (PEG Ratio) (4.412) is also within normal values, averaging (2.556). Dividend Yield (0.000) settles around the average of (0.039) among similar stocks. P/S Ratio (2.422) is also within normal values, averaging (8.478).

Notable companies

The most notable companies in this group are Amazon.com (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), PDD Holdings (NASDAQ:PDD), JD.com (NASDAQ:JD), eBay (NASDAQ:EBAY), Chewy (NYSE:CHWY), Vipshop Holdings Limited (NYSE:VIPS), Wayfair (NYSE:W), Just Eat Takeaway.com NV (OTC:JTKWY), Revolve Group (NYSE:RVLV).

Industry description

The internet retail industry includes companies that sell products and services through the Internet. With more and more consumers using online retailers, the companies have seen a big increase in the use of their services. Some of the companies in the group are focused on selling business-to-business products and services. Others sell business-to-consumer products and services. Internet retailers offer a wide variety of products like books, apparel, and electronics. Some companies even specialize in only one or two categories. One potentially critical factor for players to thrive in this space is the quality and speed of product delivery. This requires an investment in efficient distribution networks. Things like logistics are important factors in the success in the extremely competitive industry. For a company to stay relevant in the industry it must have effective pricing strategies and upgraded websites. The websites must be easy to navigate and engaging for customers. In addition to the revenues generated from straight sales, internet retailers can generate revenue from subscription fees and advertising. Amazon.com, Inc., Alibaba Group, and JD.com are some of the global leaders.

Market Cap

The average market capitalization across the Internet Retail Industry is 25.11B. The market cap for tickers in the group ranges from 30 to 1.27T. AMZN holds the highest valuation in this group at 1.27T. The lowest valued company is YUKA at 30.

High and low price notable news

The average weekly price growth across all stocks in the Internet Retail Industry was 2%. For the same Industry, the average monthly price growth was -1%, and the average quarterly price growth was -14%. YJ experienced the highest price growth at 52%, while ZLDSF experienced the biggest fall at -27%.

Volume

The average weekly volume growth across all stocks in the Internet Retail Industry was 21%. For the same stocks of the Industry, the average monthly volume growth was 53% and the average quarterly volume growth was 9%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 63
P/E Growth Rating: 70
Price Growth Rating: 54
SMR Rating: 78
Profit Risk Rating: 94
Seasonality Score: 26 (-100 ... +100)
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Technical Analysis# Of IndicatorsAvg. Odds
   
   
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A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a provider of on-line retail shopping services

Industry InternetRetail

Profile
Fundamentals
Details
Industry
Internet Retail
Address
410 Terry Avenue North
Phone
+1 206 266-1000
Employees
1541000
Web
https://www.amazon.com
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AMZN and

Correlation & Price change

A.I.dvisor indicates that over the last year, AMZN has been loosely correlated with EBAY. These tickers have moved in lockstep 65% of the time. This A.I.-generated data suggests there is some statistical probability that if AMZN jumps, then EBAY could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To AMZN
1D Price
Change %
AMZN100%
+0.85%
EBAY - AMZN
65%
Loosely correlated
+2.03%
JMIA - AMZN
63%
Loosely correlated
+1.53%
MELI - AMZN
62%
Loosely correlated
+1.48%
W - AMZN
61%
Loosely correlated
+7.04%
ETSY - AMZN
60%
Loosely correlated
+0.28%
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