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The upgrade comes amid Goldman’s “preference for platforms with greater exposure to less discretionary categories and that can lean on large ecosystems of buyers/subscribers for added visibility on forward revenue trends.”
“We modestly raise our forward operating estimates (both revenue and Adj. EBITDA) to reflect: a) increased confidence in more stable customer growth and rising revenue trends; & b) steady margin progression driven by gross margin expansion (reflecting revenue mix shift) and SG&A leverage as Chewy executes on its supply chain transformation and automation.”
The analysts also reiterated a Buy rating and Conviction List place for Amazon (NASDAQ:AMZN), which remains the Top Pick in Goldman’s coverage of U.S. Internet stocks.
