After a barrage of mostly negative headlines in recent months, Facebook reports after the bell Wednesday. Despite the headwinds, analysts remain mostly bullish that the social media titan looks strong heading into the report where they'll be watching for key metrics on ad revenue, privacy and messenger integration.
Facebook has come under tremendous pressure from regulators and Congress to improve privacy and security. CEO Mark Zuckerberg recently wrote a 1,000 word op-ed defending the company and Facebook shares are down over 12 percent year to date.
J.P. Morgan's Doug Anmuth called Facebook "the most discussed and most controversial Internet name based on our recent investor meetings & calls, and we view sentiment as mixed heading into 4Q earnings."
In her Facebook preview note, Goldman Sachs analyst Heather Bellini points out that, "we note Facebook's history of beating consensus revenue expectations. ... With the exception of the last two quarters, FB has reported revenue above consensus in each of the last 12 quarters, beating Street expectations by an average of 4% ($250-$300mn)... Despite the revenue shortfall in the last two quarters, we see potential for outperformance this quarter."
Other analysts warned not to read too much into the company's report. Deutsche Bank's Lloyd Walmsley said, "We like FB shares for 2019 but do not view 4Q results as a positive catalyst, but expect more potential for estimates to increase later in 2019." BMO's Dan Salmon cautioned that, "we believe FB could outperform so long as Custom Audiences capabilities are not hindered by regulation and negative press doesn't thwart agencies/ brands, but visibility remains low."
The shares were up 2 percent Wednesday ahead of the report.
Here's what some of the other analysts think: