Amazon (AMZN) shares clocked an all-time high last week by reaching $2,722.35. According to Needham analyst Laura Martin, that milestone will soon be left in the dust as the all-conquering Amazon is heading towards $3,200.
As it happens, $3,200 is only Martin’s short-term goal. Over time, Martin reckons Amazon stock could be worth up to $5,000 per share, based on what the 5-star analyst calls "Amazon’s hidden value multiplier."
There are several of these. One is a TAM (total addressable market) expansion multiplier, based on “AMZN's track record of TAM-expanding decisions that elongate its growth runway, drive higher profitability, and lower shareholder risk via revenue-stream diversification.”
This comes down to Amazon’s knack for adding “enormous” new markets, or “areas of investment” that could not be seen “3-5 years prior to the investments.”
Another aspect of Martin’s bullish thesis concerns the way we view Amazon. Referring to the giant as merely an e-commerce company, whose focus is online retail, is a fallacy. Dig a little deeper and Amazon is, in fact, a services company.
“Over the past 5 years, AMZN’s Net Services Sales have grown from 28% of AMZN’s total sales to 43%. Net Services Sales have a 19% operating margin compared with 3% for AMZN’s Product Sales,” Martin said.
The analyst values Amazon’s media businesses at roughly $500 billion, amounting to 38% of Amazon’s overall value, while AWS, at $560 billion, is worth even more.
Add to this the ecosystem value multiplier, which refers to the fact that any business operating under the Amazon umbrella is worth 1.5x more on account of the incremental revenue generated by Amazon’s “data superiority, scale economics, and brand franchises.”
And that $5,000 long-term price target?
Martin explains, “We calculate that today’s share price embeds 10% asset growth at a 10% ROIC. Holding ROIC constant, our work finds that if AMZN grows its asset base by at least 20%, its economic profit and share price should double to $5,000/share.”
For now, Martin rates AMZN a Buy along with, as mentioned, a $3,200 price target. Investors will be pocketing a 21% gain, should Martin’s thesis play out over the coming months. (To watch Martin’s track record, click here)
Overall, there aren’t many Amazon detractors among the analyst community. Amazon's Strong Buy consensus rating is based on 1 Sell and 2 Holds vs 38 Buys. The average price target is more conservative than Martin’s, and at $2,746.78, implies upside potential of 4%. (See Amazon stock analysis on TipRanks)
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Racial diversity and financial inclusion are good for cryptocurrency and blockchain â and the industry has work to do.
That was the overarching conclusion of a virtual Juneteenth event put together by Cleve Mesidor, founder of the National Policy Network of Women of Color in Blockchain.Â
Juneteenth is the celebration of June 19, 1865, when the last group of enslaved African Americans were made aware of the Emancipation Proclamation that U.S. President Abraham Lincoln had signed two years earlier.Â
Related: Why Crypto Matters for Financial Inclusion, Feat. Celoâs Marek Olszewski
While Americaâs education system has left many ignorant of the origins of Juneteenth, there has been a revived interest in turning the day into a national holiday after protests sprung up around the world in response to the May 25 police killing of an unarmed Black man named George Floyd.
In a wide-ranging conversation Friday, panelists at the event said crypto has the potential to allow citizens to opt out of what they described as a racist financial system on Wall Street. That said, the panelists added, Black people and people of color must be part of the development of the technology for that to happen.
Read more: Bitcoin Is a Way to Repair Economic Injustice: Author Isaiah Jackson
Isaiah Jackson, founder of KRBE Digital Assets Group and author of Bitcoin & Black America, said he believes that Black investment in digital assets would create a more resilient system than Black Wall Street, a Black business district that was burned down by white mobs during the Tulsa race massacre of 1921.
Related: Libra Minus Facebook: Why Celo Is 2020âs Buzzy Token Project
âYou canât burn down cryptocurrency and blockchain technology,â Jackson said. âI want to encourage everyone to stay vigilant and make sure you start to move your money and savings out of this failing system. ⦠We need to make sure we use censorship-resistant and scarce-money systems such as bitcoin.â
Sinclair Skinner, the co-founder of pan-African bitcoin remittance firm BitMari, agreed, saying the ethos of bitcoin and the ethos of the Black community are aligned.
âWe say that Satoshi is Black,â Skinner said. âBut Satoshi was probably a Black woman because a man would have never been able to walk away and not take credit.â
More work neededDespite cryptoâs potential, however, the industry is not immune to the same societal ills that have affected the broader world, Skinner said.
âBlockchain is full of racists,â he said. âItâs just like the rest of society.â
In the fight for venture capital, blockchain enthusiasts should remember that cryptocurrency entrepreneurs and Black founders face the same issues â being turned away for being different, Mesidor said.
In turn, entrepreneurs should choose investors that have diverse funds, said Jalak Jobanputra, founding partner of Future\Perfect Ventures, an early-stage fund investing in blockchain technology and machine learning.
âWe have to make sure that diverse voices are represented unlike what happened with the internet 20 years ago when it was really created by one demographic for one demographic,â Jobanputra said.
Read more: How an Art Collective Is Using Blockchain to Protest Police Brutality
One source of funding that crypto entrepreneurs could be tapping more is Black family offices, said Genevieve Leveille, CEO of AgriLedger, a U.K.-based blockchain firm trying to ensure pay equity for farmers.
âWe are going to a technology which is very nascent and many people do not clearly see yet the opportunities,â she said. âThere are plenty of Black family offices and we should be tapping into that network.â
Crypto is also another way that Black entrepreneurs can achieve economic equality, said Jomari Peterson, a Ph.D. student at Carnegie Mellon University focused on empowering underrepresented communities through microlending and gaming.
âWe cannot wait until itâs too late and those systems are already around us,â Peterson said.
Related StoriesThe National Bank of Cambodia revealed the technical details of its upcoming blockchain-based payments system dubbed âProject Bakongâ this week.
The central bank, which has been building Project Bakong since 2017, views its quasi-digital currency project as a high-tech revamp of the Khmer Riel, Cambodiaâs official currency but hardly its de facto cash choice, as locals have favored the U.S. dollar for decades, according to the white paper published Thursday.
The central bank said Bakong will help challenge the dollarâs reign by inducing Cambodians to pay instead via QR codes and a mobile app, with a Hyperledger Iroha blockchain facilitating real-time fund transfers between e-wallets plugged into their bank accounts.Â
Related: How an Art Collective Is Using Blockchain to Protest Police Brutality
That permissioned blockchain will work between Bakong accounts and traditional accounts, record transactions on a distributed ledger, reach consensus via the block voting hash-based âYet Another Consensusâ algorithm, and process transactions in five seconds or less, according to the white paper.
âTransaction throughput is between 1,000 and 2,000 transactions per second,â depending on tech specs, the central bank said in the white paper. âThis suggests that there is potential for this project to scale.â
Watch: Cambodiaâs Project Bakong and the Future of Payments
The bank said its systemâs peer-to-peer nature removes the inefficiencies of centralized clearing house models without costing users anything to transact.Â
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âSince banks and individual users are now brought into one DLT platform both banks and users no longer face interconnectivity and interoperability problems,â the central bank said.
Quasi-digital currencyCambodian officials have been hesitant to label the fiat-backed Project Bakong a central bank digital currency (CBDC) in the past, instead calling it a blockchain payments system. Users must load Riel into their Bakong accounts before they can transact with others. Thatâs different from a natively digital CBDC.
Even so, the white paper frames Bakong against the proliferation of CBDC projects in highly-developed countries around the world. But while the paper said such nations may turn to CBDC to address their populationâs falling cash use rates, in developing countries â a category in which Cambodia may remain for decades â it said that CBDC can promote financial inclusion, improve inefficient payment systems and even reduce poverty by opening access.
(Notably, the National Bank of Cambodia is one of the few central banks whose future-of-money initiative actually relies on a blockchain.)
The demographically-young and increasingly tech-savvy population of Cambodia will likely boost Bakong adoption, according to the bank. Cambodians are increasingly porting their financial lives onto their phones: e-wallet accounts in the country climbed 64% in 2019 to a record 5.22 million, according to the paper.
See also: Policymakers Shouldnât Fear Digital Money: So Far Itâs Maintaining the Dollarâs Status
Mass adoption may also grant the central bank a greater degree of control over Cambodiaâs monetary policy by breaking the dollarâs decade-long local hold. Bank officials are already moving to oust the U.S. dollar: Last month, the central bank announced plans to phase out $1, $2 and $5 banknotes by the end of August.
It is still unclear precisely when Project Bakong will fully launch. The white paper said âearly 2020,â despite being published midway through the year.
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