Analyst Anthony DiClemente projects Amazon's 2020 earnings at $44.30 share, more than double the company's 2018 profit of $20.10.
"Given Amazon's shifting business mix, the pace of gross profit growth has become a more relevant indicator of the health of the business, and as such, should be the key metric used to value the company," DiClemente wrote. "As such, we remain bullish on Amazon at least in part because the company's gross profit is expected to grow about 400 basis points faster than revenue for Amazon over the next three years."
One of the factors driving Amazon's future profit growth will be its nascent grocery business. On Friday, The Wall Street Journal reported that the company was planning to open its first non-Whole Foods affiliated grocery store by the end of the year.
After that, the company reportedly plans to open dozens of stores in cities like Chicago, Los Angeles and Washington D.C.
The stores will have a minimal near-term impact on the company, according to a Morgan Stanley note Friday.
"We think any near-term impact is likely to be limited as our retailers are typically in suburban locations and AMZN is targeting densely populated markets first; TGT has a number of smaller stores in urban markets, but they represent a small portion of total revenue today," Morgan Stanley analyst Brian Nowak said.
Meanwhile, DiClemente said that Amazon's e-commerce business is worth $230 a share while its third-party business is worth $490 a share. The company's advertising business is worth about $150 a share, he said The company's biggest piece is Amazon Web Services, which the analyst has priced at $990 a share.
Amazon is a key holding in Jim Cramer's Action Alerts PLUS charitable trust.