Facebook needs to beat expectations on Wednesday or it may face a near-term day of reckoning, as its sky-high valuation has investors demanding a scale of growth not expected in any of its major rivals.
"This is the highest-bar stock of the internet space," said RBC Capital Markets analyst Mark Mahaney. "An in-line quarter will not cut it for Facebook, the stock, as a trade."
Mahaney expects Facebook to report quarterly revenue of $5.43 billion and non-GAAP earnings per share of 68 cents. That is just above Wall Street consensus, at $5.25 billion and 62 cents respectively, according to Thomson Reuters.