Yahoo Finance Amazon (AMZN) Expands Same-Day Medication Delivery Service
Amazon AMZN has expanded its same-day medication delivery service to New York City and Los Angeles in a bid to bolster its online pharmacy retail business, Amazon Pharmacy.
With this move, patients suffering from flu, high blood pressure, diabetes or any other common conditions located in NYC and the greater Los Angeles area will now be able to receive their prescribed medicines within a few hours.
For this purpose, Amazon Pharmacy is using new small-format facilities stocked with common medicines to boost the delivery speed.
Reportedly, AMZN has made plans to deploy a pharmacist and a fulfillment team somewhere in Brooklyn to boost the delivery speed.
Further, it is looking forward to leveraging generative AI and machine learning technologies in the series of fact-checking tasks in order to speed up the fulfillment process.
Amazon intends to expand the same-day delivery of prescription medication to over a dozen cities in the United States by the end of this year. The service is currently available in Austin, TX; Indianapolis, IN; Miami; Phoenix, AZ and Seattle, WA.
The company’s deepening focus on the expansion of the underlined service will enable Amazon Pharmacy to boost its reach to patients, which, in turn, will benefit its online retail business, the key growth driver for Amazon.
AMZN has gained 17.3% year to date, outperforming the industry’s rally of 9.7%.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Growing Pharma Retail Efforts
Per a report from Statista, the online pharmacy market is expected to generate revenues of $52.51 billion in 2024. The figure is expected to hit $81.37 billion by 2028, witnessing a CAGR of 11.6% between 2024 and 2028.
Amazon remains well-poised to capitalize on the growth prospects present in this market on the back of Amazon Pharmacy, which allows customers to place their medicine orders with the help of a prescription from a licensed healthcare provider. Moreover, the company’s growing online pharma retail efforts remain noteworthy.
Apart from the latest move, Amazon recently teamed up with Eli Lilly LLY. Per the terms, Lilly selected Amazon Pharmacy for the home delivery of drug prescriptions that are sent to its direct-to-consumer service, LillyDirect. This service is limited to certain drugs, which include medications for diabetes, obesity and migraine.
In addition, the company’s introduction of RxPass, a Prime membership benefit, is another plus. It enables Prime members to receive all of their eligible medications for one flat monthly fee of $5 and get them delivered for free.
The company also launched the drone delivery of medicines from Amazon Pharmacy, which is a major positive. Amazon Pharmacy promises to drop a package within 60 minutes of order placement.
All the above-mentioned efforts will not only aid the company’s online store sales but also will drive growth in its subscription revenues, thanks to pharmacy related Prime perks. This, in turn, will likely drive Amazon’s overall top-line growth.
For first-quarter 2024, Amazon expects net sales between $138 billion and $143.5 billion. Net sales are expected to grow 8-13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for the same is pegged at $142.42 billion.
Zacks Rank & Other Stocks to Consider
Currently, Amazon has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are eBay EBAY and The Kroger Co. KR, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
eBay has gained 17.7% on a year-to-date basis. The long-term earnings growth rate for EBAY is projected at 6.71%.
Kroger has gained 24.1% on a year-to-date basis. The long-term earnings growth rate for KR is projected at 4.84%.
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