The research firm admits that the international revenue growth rate lags behind from that of North America but it believe that this is mainly because of lower Prime eligible Stock Keeping Units (SKUs) internationally. It backs up its opinion by stating the revenue figures of three major international players that includes Germany, UK, and Japan. In 2014, these countries contributed revenues of $11.9 billion, $8.3 billion, and $7.9 billion, respectively. This accounted for 34% of the total retail revenues for the company. As for the investor concern about the increasing competition, Bernstein did a research in all of the major international regions. It concluded that the company’s proposition is unique and unmatched in both, The US as well as the major international markets. In Japan, the offer of unlimited free guaranteed delivery within three business days is still unique. No competitors have developed a loyalty scheme and so they all lag behind by great margin. The price target by Bernstein is based on a multiple of 2016 EBITDA projections. The risks involved with this judgment include global economic conditions, cyber-security, global competition, and failure to grow AWS or third party programs.
