Amazon (AMZN) Halts Loan Repayment to Promote Seller Interest

Zacks Equity Research

Amazon AMZN recently announced that it is temporarily halting loan repayment in a bid to promote sellers’ interests during the coronavirus-induced crisis.

Notably, the company’s Amazon Lending program, which has provided financing worth millions to several merchants on its platform, does not require borrowers to pay back their loans until Apr 30.

The latest move is in favor of merchants who are witnessing decreasing sales and contracting profits on account of the coronavirus pandemic, which has resulted in lockdowns in several countries and consequently triggered a financial crisis.

Amazon Striving to Sustain Seller Momentum

Although the current scenario of quarantines is leading to surge in online orders, the e-commerce giant has put temporary ban on the supply of non-essential and luxurious commodities to reduce the spread of the deadly virus

This, in turn, is hurting the top line of several sellers on the company’s online retail platform.

Nevertheless, the latest loan repayment pause reflects Amazon’s seller-oriented approach. The process of paying back loads will restart on May 1. The amount of payments will remain same and interests will not get accrued.

We believe efforts toward the betterment of sellers are expected to help the company retain them on its platform, thus sustaining its momentum across sellers amid coronavirus-induced disruptions.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Wrapping Up

Amazon is constantly taking measures to reduce the risk of spreading the coronavirus. Further, its strong endeavors toward serving the interests both the society and merchants remain noteworthy.

These are likely instill investor optimism in the stock amid this challenging situation.

Moreover, a strong seller base and aggressive retail strategies are likely to continue aiding the performance of Amazon online-retail business.

Further, the company’s growing initiatives toward strengthening its ultrafast delivery system remains a major positive.
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All these factors are expected to continue aiding Amazon in sustaining its dominant position in the booming e-commerce market despite the coronavirus scare.

Zacks Rank & Other Stocks to Consider

Currently, Amazon carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the retail-wholesale sector include Stamps.com STMP, eBay EBAY and Genesco GCO. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Stamps.com, eBay and Genesco is pegged at 15%, 11.25% and 5%, respectively.

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