Facebook is getting close to maxing out its ad load — the ratio of ads to user generated content — CFO David Wehner warned last quarter. This will start to impact revenue growth in the second half of next year, he said. Wall Street will be listening for more on this, said Mizuho analyst Neil Doshi.
"Maybe they're good enough that when the slow the ad load at core Facebook in the back half of next year, they start to bring the Messenger and WhatsApp monetization. But I don't think it will be impactful near term," Blackledge said.
User engagement — how much Facebook's 1.71 billion monthly active users use the app — is another thing investors watch very closely.
Most analysts believe Facebook's user engagement numbers remain steady. In the third quarter, the amount of time Facebook users spent on its flagship app held steady at levels 25 percent higher than Snapchat, Nomura analyst Anthony DiClemente wrote in a note to investors on Oct 17. Facebook's suite of apps also retook the top 4 spots in app downloads, he noted.
Despite the gains, U.S. visitors continue to decline, according to comScore data, cited by Mizuho's Doshi. Facebook had 205 million unique U.S. visitors in September, down from 206 million in August, and a 5 percent dip compared with September 2015.
"What we want to hear from Facebook… is engagement," Blackledge said. "And particularly, engagement at core Facebook. Remember, there's a lot of buzz in the investment community about Snapchat."
Blackledge said Cowen's proprietary data shows that in the 18 to 24 cohort, Facebook has more users than Snapchat.
"Aside from sharing content and video viewing, Facebook has broader use cases, namely news consumption is huge on Facebook and a big differentiator," Blackledge said.
Correction: This story was revised to correct the spelling of the last names of Joshua March and Anthony DiClemente and to update Facebook's monthly active user number.