Facebook is set to report earnings after the bell on Tuesday and investors will be looking for signs to see if the social networking giant can sustain its strong growth story.
Solid earnings have helped push the company's stock price up more than 30 percent during the last six months. In the second quarter the company reported revenue of $1.81 billion, a 53 percent increase from the same quarter a year ago, and earnings of 19 cents per share.
But the company warned during its earnings conference call last quarter that investors should not expect to see the same kind of top line growth during the second half of the year. Despite the company's caution, Wall Street's estimates are still pretty optimistic.
The company is expected to post earnings of $0.40 per share on revenue of $3.12 billion, according to a survey of analysts by Thomson Reuters. Year-over-year, that's growth of 61 percent and 55 percent, respectively.
But even if the company misses the expectations this quarter, Facebook has several powerful revenue drivers that it will put to work in the coming months, said said Mark Mahaney, an analyst at RBC Capital Markets, on CNBC's "Squawk on the Street" on Monday.
Even if Facebook's earnings disappoint, "you have these upcoming catalysts, new revenue streams like autoplay video ads, Instagram monetization and people are going to want to buy the stock before that starts rolling out and it's rolling out in the next three to six months," said Mahaney, who has a price target of $92 on the stock with a rating of "outperform."
The company already has rolled out video and Instagram ads on a small scale, but it remains to be seen if there will be a significant impact from these ads in the third quarter, analysts said.
Investors should note that later this week 8.8 percent of Facebook's outstanding stock, or more than 170 million shares, could become available as the lockup period expires for stock sold during the WhatsApp acquisition. If the company reports a big earnings miss, this could spur selling, Mahaney said.
"If there is a real negative surprise that lock-up expiration will amplify the downwards move," Mahaney said. "If there are positive results, I don't think you'll have a major hit to the stock from the downside."
Investors will also be paying close attention to Facebook's user growth and ad revenue.
Facebook showed healthy user growth in the second quarter, with its monthly average users (MAUs) growing 14 percent year-over-year to 1.32 billion. Mahaney estimates the company will continue robust growth with a 13 percent increase in users year-over-year in the third quarter to 1.34 billion users.
Despite growing competition in the ad space, the company's ad revenue is also poised for significant growth in the third quarter, analysts said.
Brian Wieser, an analyst at Pivotal Research, said in a recent note to clients he estimates Facebook will account for 10 percent of all online advertising in the U.S. this year and 12.5 percent in 2015. The company seems on track to deliver such results, especially given its strength in mobile.
In the second quarter, Facebook reported more than $2.6 billion in ad sales, which was a 67 percent increase year-over-year, with mobile advertising accounting for about 62 percent of all ad revenue.
Facebook's dominance in mobile is unlikely to waver in the third quarter, said Mark Josephson, CEO of Bitly, which is a tech company that works with thousands of marketers to improve their performance on social platforms.
Josephson said Bitly tracks more than 8 billion clicks a month across every platform and has deep insight into how consumers are interacting with different social networks.
"The Bitly data is really interesting for the third quarter over the second quarter. The first thing is the continued dominance of Facebook," Josephson said on CNBC's "Squawk Alley." "It's incredible how fast they have been accelerating their growth and grabbing share in overall click volume."
Mahaney said he also expects mobile ad growth to continue to drive ad sales for the quarter and estimates the company will report $2.85 billion in ad revenue, or a 59 percent increase year-over- year.