Wall Street is buzzing over Facebook's latest earnings results, which topped Wall Street's expectations despite recent uproar about the company's handling of user information.
While details of the Cambridge Analytica scandal were only just emerging as the first quarter ended, news of a hefty beat on both the top and bottom lines came as a "sigh of relief" to many Wall Street analysts bracing for more bad news.
Many mentioned the fact that David Wehner, Facebook's chief financial officer, said that a sweeping new data protection law in the European Union could stall user growth in Europe quarter over quarter. The regulation is known as the General Data Protection Regulation (GDPR).
There is "certainly potential for some impact" to Facebook's ad revenue, Wehner said. But the company doesn't "really see a doomsday scenario here."
Facebook posted earnings per share of $1.69 adjusted (versus $1.35 expected) and revenue of $11.97 billion (versus $11.4 billion expected).
Here's what Wall Street's analysts thought about Facebook's results:
J.P. Morgan Chase
"Overall, we view first-quarter earnings as providing a sigh of relief and a quarter that can begin to get investors re-engaged in Facebook shares. We recognize this may not happen overnight as Facebook cautioned a bit on European users in the second quarter due to General Data Protection Regulation law, and regulatory risk remains ... Facebook remains our favorite large-cap stock and we believe represents a compelling opportunity at current levels."
Goldman Sachs
"Facebook reported another solid quarter after the close, with no signs of a spending slowdown, despite concern from the recent Cambridge Analytica scandal. Total ad revenue exceeded FactSet consensus by roughly $545 million ... Management tightened its total expense guidance forecast for calendar year 2018 from 45 percent to 60 pecent year over year growth to 50 percent to 60 percent, with the key reason for the tightening due to a faster ramp in spending related to its security and platform safety initiatives."
Morgan Stanley
"Strong first-quarter shows how Facebook's industry-leading return on invesment and innovation are driving outsized advertising/free cash flow growth. Heavy 2018 investment (operating expenditure/capital expenditure) is a positive, as it plants seeds for even longer growth. We think Facebook's increasingly utility-like status will offset any material General Data Protection Regulation impact. Remain overweight."
Citigroup
"Facebook's first-quarter revenue was not only better than what the early agency checks suggested but in-line with the most aggressive scenario we laid out yesterday based on Google-parent Alphabet's first-quarter advertising results, with adversiting revenues of $11.8 billion, up 50 percent year over year."
Bank of America
"Advertising revenue growth (excluding foreign exchange effects) of 43% year over year was better than the 3 to 4 points of deceleration the Street was anticipating, with robust ad pricing (up 39 percent year over year) and reacceleration of ad impressions (up 8 percent year over year) driving the beat. Instagram momentum continues, and management also called out favorable reception of newer ad formats and features. Overall, Facebook delivered a strong financial quarter and stable user growth trends."
Evercore
"While anxiety has run high around Facebook in recent weeks, its first-quarter results and forward outlook should ease fears. FX-neutral revenue growth slowed less than 200 basis points to 43 percent and reported ad revenue accelerated to 50 percent. User and engagement metrics proved steady, with U.S. & Canada daily active users returning to growth and worldwide daily active users/monthly active users improving sequentially."
Jefferies
"Despite all concerns, Facebook accelerated growth to 49 percent top line. Bears will point to the recent turmoil occurring at the end of the quarter and upcoming General Data Protection Regulation implementation and escalating costs, but we do not see any signs that Facebook is slowing meaningfully. We see the upside to our $215 price target outweighs downside given continued fundamental execution and growth."
RBC Capital Markets
"Facebook reported a very strong first quarter, with results coming in well ahead of expectations and growth trends remaining very impressive. Facebook tightened up its operating expenditure growth for 2018 from 45 percent to 60 percent to 50 percent to 60 percent (for platform security), but suggested that General Data Protection Regulation is unlikely to impact ad revenue growth. Estimates not materially changed. Price target remains $250. Outperform."
—CNBC's Michael Bloom contributed to this report.