Pacific Crest on Thursday predicted Facebook would report solid earnings on Feb. 1. The research firm reiterated an overweight rating on the social media giant.
"We believe Facebook's scale in engagement provides a significant barrier to entry and a competitive advantage in testing, analyzing and rapidly evolving new services. In 2017, we expect this to help it continue increasing average engagement across its key platforms and increasing ad pricing," equity analyst Andy Hargreaves wrote in a research note.
Hargreaves believes Facebook is positioned to quickly evolve its video service to increase user engagement and create another source of incremental revenue.
Shares of Facebook are up 14 percent this month, recovering from a recent low reached at the end of December.