Wall Street is underestimating the potential revenue impact of Amazon's move to one-day shipping, SunTrust's analyst Youssef Squali wrote in a note on Friday.Squali pointed to the revenue acceleration Amazon saw in 2005 after the launch of its two-day-shipping service as evidence of shorter delivery time driving sales growth.Morningstar's R.J. Hottovy also wrote on Wednesday that Amazon's ability to deliver quickly could lead to wider adoption of its grocery-delivery servicewhich would result in more robust sales growth.Click here for more BI Prime stories.If past performance is any indication, Amazon's move to shorten its delivery time by a day could lead to revenue acceleration in the coming yearsand outpace Wall Street's estimated growth rate, according to the financial firm SunTrust Robinson Humphrey.In a note published on Friday, SunTrust's analyst Youssef Squali pointed to the "strong revival" in Amazon's retail business after the 2005 launch of its two-day Prime delivery program. At the time, the revenue growth rate of Amazon's retail business jumped from 22% in 2005 to an average of 32% over the next five years, despite a major recession in 2008.That data is one of the reasons Squali believes Wall Street is underestimating the potential impact of Amazon's one-day shipping on its top-line growth.Amazon's retail business is expected to grow 18% in 2019 but decelerate to 17% and 14% in the following two years, respectively, according to FactSet consensus estimates. But Squali predicted more robust growth rates of 17%, 20%, and 19% for 2019, 2020, and 2021, respectively, according to his note."We believe current Street estimates do not adequately reflect the benefits from Amazon's 1-day shipping initiative ... the company can actually sustain, and potentially accelerate its top line growth, given the impact to-date on unit growth, and what we observed in 2005 onward following the launch of free 2-day shipping," the note said.It's not the first analyst note to express excitement over the potential of Amazon's one-day shipping. Last week, Morgan Stanley raised its price target for Amazon, saying the company would likely have higher long-term profits as a result of rolling out one-day shipping to more products. Piper Sandler wrote in a note last month that one-day shipping could add up to $50 billion in annual revenue for Amazon, while RBC estimated a $24 billion annual sales increase for the company.Amazon announced plans to shorten its standard delivery time from two days to one day in April. The company said it had spent about $3 billion last year in rolling out one-day delivery to its site, but it hasn't disclosed exactly how many products are eligible for the new service.The latest update on one-day shipping is likely to be a big topic when Amazon reports its fourth-quarter results on January 30.The grocery bonusAmazon's ability to deliver faster could also lead to the broader adoption of its grocery delivery servicewhich could serve as a catalyst for more growth, according to Morningstar's analyst R.J. Hottovy.In an article published on Wednesday, Hottovy wrote Amazon's decision to make grocery-delivery free for Prime members last year could drive further sales growth. He said the choice likely resulted in an over 30% increase in consumer adoption and order frequency rates.That's important because it would justify Amazon's heavy investment in one-day delivery. Amazon spent about $3 billion last year on expanding its warehouses and delivery footprint to make one-day shipping the default for its Prime members."Because grocery is a high-frequency category, continued consumer adoption in 2020 could set the company up for revenue upside surprises in the quarters and years to come," Hottovy wrote.SEE ALSO:Jeff Bezos' 'shadow' adviser position is empty for the first time in years as Amazon and his personal life face unprecedented scrutiny ' here are the 7 most successful executives who once filled that roleJoin the conversation about this storyNOW WATCH: Watch Elon Musk unveil his latest plan for conquering Mars
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