Social Commerce: did META and AMZN just break new ground?

Are you ready for the rise of Social Commerce?

Roth MKM analyst Rohit Kulkarni says he is liking Facebook’s (Facebook Stock Quote, Chart, News, Analysts, Financials NASDAQ:META) integration with Amazon, and says the former’s stock is undervalued.

In November 2023, Meta announced a feature that would let users connect their Facebook and Instagram accounts to their Amazon (AMZN-Buy) accounts, so they could more easily buy goods promoted on their feeds without leaving Meta apps. Over the weekend, we noticed several personalized Amazon ads in our FB/IG feeds with this feature enabled. Our checks indicated that this integration was moving quickly, but we are surprised at the speed of rollout of this integration,” he said.

In a research update to clients March 18, Kulkarni maintained his “Buy” rating and price target of $500.00 on META.

The analyst thinks META will post EPS of $20.40 on revenue of $159.7-billion in fiscal 2024. He expects those numbers will improve to EPS of $22.19 on a topline of $174.5-billion the following year.

“Meta-Amazon synergy will likely redefine the e-commerce landscape, creating a seamless “social commerce” bridge between advertising and shopping,” Kulkarni added. “Meta will now be using information sent from Amazon and stores offering Buy with Prime to show consumers ads leading to better targeting and optimization. Consumers will be able to check out more quickly on ads when they connect their accounts, leading to higher conversion rates. Meta will tailor an ad’s messaging and product page based on whether a user is a Prime member and alter additional information such as real-time pricing and shipping estimates.”