Amazon's Music Service And Echo Available In 28 New Markets

Amazon.com Inc. (NASDAQ:AMZN) recently announced expansion of its Music Unlimited service in 28 countries. The company has also begun to ship Amazon Echo devices in these countries.

The streaming service contains 40 million tracks and is not part of Amazon Prime as the latter is not available in these markets.

Amazon’s Echo devices are powered by Alexa smart assistant. Per eMarketer, the devices hold almost 70% of the smart speakers market.

Per Cowen & Co. consumer tracking survey, 84% of the Echo users in the United States use it for listening to music. Thus, widening coverage in 28 new countries will help in expanding the company’s Music Unlimited user base. Consequently, its recurring revenue base will improve.

Shares of Amazon have gained 54.9% year to date, substantially outperforming the 18.8% rally of the S&P 500.

Strong Echo Dot Sales to Drive Growth

The demand for Echo devices remains strong. This was clearly reflected in the Thanksgiving weekend and on Cyber Monday.

Per the company’s statement, Echo Dot was the top-selling product on Amazon.com over the holiday weekend. Moreover, it was the best-selling product from any manufacturer in any category on Amazon. Notably, Echo Dot was also Amazon’s bestselling product across manufacturers and categories worldwide on Prime Day’17.

Alexa powered Echo devices help Amazon in selling products and services. The idea is to make Alexa the central point connecting IoT devices used in any household and get unrivaled customer data.

We believe that the expansion will enable Amazon to collect more user data that it can utilize to provide more customer-oriented services. This will bode well for the company’s top line in the long haul.

Zacks Rank & Stocks to Consider

Amazon has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same industry include Groupon (NASDAQ:GRPN) , PetMed Express (NASDAQ:PETS) and Alibaba (NYSE:BABA) . While Groupon and PetMed sport a Zacks Rank #1 (Strong Buy), Alibaba carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, PetMed and Alibaba is currently projected to be 10%, 10% and 30.7%, respectively.

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