NEW YORK (TheStreet) -- Shares of Facebook Inc (FB) are down 0.26% to $81.95 in early market trading Thursday, as the social media giant teams up with Shopify (SHOP) to expand a beta test of its new "buy" button, according to TechCrunch.
Facebook and e-commerce company Shopify are working on the "buy" button feature, which will let consumers buy goods from more retailers without leaving the social media site, TechCrunch reports.
The "buy" button could help Facebook compete with Pinterest, which just launched its own feature that allows for in-line transactions, TechCrunch noted.
Google (GOOGL) is also planning to offer something similar within its advertisements.
Robert W. Baird analyst Colin Sebastian said on CNBC this morning that the "buy" button gives Facebook an incremental revenue stream.
Menlo Park, Calif.-based Facebook is a social networking website company, with its applications enabling customers to stay connected with their friends and family.
Insight from TheStreet's Research Team:
Facebook is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. In a recent post, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:
This morning, Canaccord Genuity published a note on Facebook (FB:Nasdaq) detailing the stock's attractive valuation and future potential. While we don't typically rehash research notes, we found Canaccord's perspective especially interesting and in line with our views. More specifically, the note took a deep dive into the various revenue drivers supporting Facebook moving forward.
First, user and engagement growth should continue to drive value, as both monthly average users (MAUs) and daily average users (DAUs) are growing at a breakneck pace (10%+ and 17%, respectively, in the first quarter).
Even more, 65% of monthly users are also daily users (up from 60% two years ago). The accelerating growth in international markets (MAUs in Asia up 21% and rest of world up 15% y/y) will provide support, as North America and Europe slowly but surely begin to mature.
Even though ad revenue is growing 3x faster than users, we still see room for improved monetization as its monetization rate is substantially lower than both those of YouTube and Twitter (TWTR:NYSE). In respect to Instagram, Facebook expects the platform to generate over $1.2 billion in revenue next year and nearly $4 billion by 2018, as the app continues to expand its advertising capabilities.
All in, we share Canaccord's sentiment and think shares are undervalued at current levels. As the company continues to find innovative ways to monetize its highly engaged user base, the stock will only become more attractive. We reiterate our $90 target.
Want more information like this from Jim Cramer and Jack Mohr BEFORE your stock moves? Learn more about ActionAlertsPLUS.com now.
Separately, TheStreet Ratings team rates FACEBOOK INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: FB Ratings Report