Amazon Buys Podcast Startup Wondery; Street Sees 16% Upside

Amazon announced the acquisition of podcast startup Wondery in a move to further strengthen its non-musical content on Amazon Music app.

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Amazon (AMZN) didn’t disclose the financial terms of the deal. However, the company said that listeners will continue to access Wondery podcasts through several mediums following the deal closure.

Earlier this month, The Wall Street Journal had reported that the two companies are in exclusive discussion and a deal could probably value Wondery at $300 million.

In a blog posted on its website, the Amazon Music team said, “Amazon Music launched podcasts in September 2020, and together with Wondery, we hope to accelerate the growth and evolution of podcasts by bringing creators, hosts, and immersive experiences to even more listeners across the globe, just as we do with music. This is a pivotal moment to expand the Amazon Music offering beyond music as listener habits evolve.” (See AMZN stock analysis on TipRanks)

On Dec. 21, Monness analyst Brian White reiterated a Buy rating and a price target of $4,000 (21.7% upside potential) on the stock.

In a note to investors, White wrote, “we believe the company’s growth path is very attractive across the e-commerce segment, AWS [Amazon Web Services], digital media, advertising, Alexa and more. Also, we expect the COVID-19 to drive accelerated digital transformation, benefiting the company’s business model. Moreover, the company has started to deliver more attractive profit trends over the past couple of years.”

Overall, the consensus among analysts is a Strong Buy based on 35 Buys and 1 Hold. With shares up 77.8% year-to-date, the average price target of $3,805.76 implies further upside potential of about 15.8% to current levels.