Wall Street analysts have spent the last three months cutting their 2017 profit forecasts for Facebook.
But you wouldn't know it by looking at a chart of Facebook shares, which are up roughly 40 percent year to date, as the company prepares to release second-quarter results next Wednesday.
Just ahead of its much-anticipated financial report and conference call with CEO Mark Zuckerberg on July 26, the average full-year, 2017 Wall Street earnings estimate on Facebook is $4.85 a share.
In mid-April, before Facebook reported first-quarter results, that consensus number among the 43 analysts who rate the company's stock was $5.44 per share.
In other words, people who are paid to follow Facebook's business closely think it will earn about 11 percent lower profit this year than they did at the start of the quarter.
More video means more ads AND more costs
An expectation of higher capital expenditures may be one reason why Wall Street has pulled back.
"We continue to expect that full-year 2017 capital expenditures will be in the range of $7 billion to $7.5 billion, which is up over 50 percent compared to last year," CFO David Wehner said on the company's first-quarter earnings call in May.
"As we look into 2017 and beyond, there are going to be a number of initiatives we believe are valuable ... in the long term that are going to be net negative on our operating margin."
In particular, Facebook is building more data centers to handle an explosion in the video traffic it hosts on its internet pages.
"Over the past year, daily watch time for Facebook Live broadcasts has grown by more than four times," Zuckerberg said on the company's first-quarter conference call on May 3.
And Facebook Live is only one of its video products, representing 20 percent of all video, Zuckerberg said then.
Handling all that web traffic means Facebook is building more facilities to house and cool its Internet servers. The company broke ground on its ninth data center in the first quarter, Wehner said on the first-quarter call.
Video also has other costs: Zuckerberg also said on that same first-quarter call that Facebook is adding 3,000 workers to sift through its content and remove videos that promote acts of terrorism, other forms of violence and fake news articles.
The company made the announcement after YouTube, the video unit of rival Google, lost some advertisers and had to scramble to keep others that were concerned about damage to their brands should their ads be placed alongside objectionable content.
Finally, the company is reportedly working with publishers to acquire rights for TV-style scripted programming, which adds another new expense.
Thanks to Facebook's rising stock price and analysts' lower profit estimates, the company is now trading at a price-to-earnings ratio of 33.6 (calculated using expected earnings for this year).
That's high even for a Nasdaq stock and a reminder that although the company is a favorite of growth investors, those concerned about value should be leery of owning its shares.
According to data from Birinyi Associates, the most valuable 100 stocks in the Nasdaq Index are trading for an average price-to-earnings ratio of 20.9, as of last Friday.