Investors are still undervaluing Amazon.com's (NASDAQ:AMZN) shares. So says Needham analyst Laura Martin.

On Tuesday, Martin began coverage of the online retail and cloud computing juggernaut. She placed a buy rating and $3,200 target price on its shares -- and said they could be worth as much as $5,000 over the longer term. Martin's near- and long-term targets represent potential gains for investors of roughly 20% and 90%, based on Amazon's current share price of $2,642.

A digital bull is climbing an upwardly sloping stock chart.

Amazon is poised to deliver strong returns to shareholders, according to Needham analyst Laura Martin. Image source: Getty Images.

Martin values Amazon's media businesses -- including its Prime Video and Prime Music streaming services, as well as its video game streaming platform Twitch -- at approximately $500 billion. That makes them nearly as valuable as Amazon Web Services, the company's industry-leading and rapidly expanding cloud infrastructure business. 

Martin argues that due to their higher profit margins, Amazon's digital media operations should command higher valuation multiples -- such as price-to-earnings and price-to-cash flow -- than its lower-margin retail operations.

Additionally, Martin says these services help to strengthen Amazon's data collection capabilities, and, by extension, its ability to create successful new products. 

Is Amazon stock worth $5,000? 

Not today, but it certainly could be within the next few years. Amazon continues to grow sales and operating profits at an impressive clip, driven in part by a coronavirus-fueled acceleration in the growth of e-commerce and cloud computing.

Moreover, Martin makes some excellent points regarding the often-overlooked value of Amazon's quickly expanding media empire -- and its ability to reinforce the other aspects of its already booming business. If her theory is correct and investors become more willing to pay a higher multiple on Amazon's profits and cash flows as its margins improve, Amazon's stock price could easily hit $5,000 inside of five years -- and perhaps much sooner.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.