Why Amazon Could Generate More Revenue Than WalMart In 7 Years

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Why Amazon Could Generate More Revenue Than WalMart In 7 Years

With all the talk about Amazon’s ($AMZN) dominance in retail, it is still the very early innings. Using a regression analysis using Amazon’s current growth, Amazon’s total sales could eclipse those of WalMart ($WMT) in just seven years, putting the eCommerce giant’s total revenue at nearly $600 million.

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The war between Amazon and WalMart is likely just beginning, and the casualties may be all the other smaller retailers.  But the real story will be Amazon; shares are trading higher by about 1.5 percent and are now trading over $1200, an all-time high. It seems that shares just continue to gain more momentum with a stock price that just continues to defy gravity.

Big Already

The company already has a commanding 17.5 percent weighting in the Consumer Discretionary ETF ($XLY). The next most significant stock is Home Depot ($HD), which stands just at 7.5 percent. So much of the discretionary rise in 2017 has mostly to do with Amazon, which has now risen by over 58 percent in 2017.

Amazon, Netflix Discretionary

(Data Provided By Ycharts)

Massive Growth

The growth in revenue has turned exponential and appears to be still ramping up.  It would seem that most of Amazon’s success has come at the cost of others, like Target ($TGT), Best Buy ($BBY), Macy ($M), and Sears ($SHLD). The chart below shows how Amazon’s revenue has continued to climb, while the other major retailers have either had flat or declining revenue. It would suggest that whatever growth has been created in the industry from 2010, as gone directly to Amazon.

AMZN Revenue (TTM) Chart

AMZN Revenue (TTM) data by YCharts


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WalMart Is Still Much Bigger

Then of course when adding in WalMart, you can begin to see just how much growth Amazon has.

AMZN Revenue (TTM) Chart

AMZN Revenue (TTM) data by YCharts

If one adds up the revenue totals on a trailing-twelve-month basis, of Amazon, Sears, Target, Dillards, Macy’s, JC Penney, Best Buy, and Bed, Bath and Beyond it total $346.56 billion, still $148 billion or 30 percent shy of WalMarts $495 billion in revenue.  Through 2017 analyst consensus estimates see Amazon’s total revenue rising to $275.28 billion, an increase of almost 71 percent.  Even at the point, Amazon’s revenue would only account for 47 percent of WalMart’s total revenue.

AMZN Revenue (TTM) Chart

AMZN Revenue (TTM) data by YCharts

But the rest of those companies, are showing no or declining revenue growth.

SHLD Revenue (TTM) Chart

SHLD Revenue (TTM) data by YCharts

Could Amazon Be Bigger Than WalMart?

Running a regression model of Amazon’s revenue and analyst forecasted revenue through 2019, we can predict revenue growth.  Amazon could actually pass WalMart on total sales by the year 2023. Of course, Amazon would need to continue to grow at its current rate, which is undoubtedly no easy task at all. But certainly it puts things into perspective, that Amazon likely has a very long runway of growth ahead of it.

Amazon Walmart Revenue

So if retailers are scared of Amazon now, they better start getting terrified, because at the pace Amazon is growing it may soon be the most massive retailer.

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Tags: #amazon #walmart #retail

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