What The Street Thinks Of Facebook Ahead Of Earnings

Facebook Inc FB is scheduled to report Q1 2015 earnings results after Wednesday's market close. Several Wall Street firms have given their opinion ahead of the announcement.

Wedbush: Outperform, $94 Price Target

Shyam Patil and Andy Cheng wrote:

"We expect Facebook to report a solid 1Q with mode st upside to consensus revenue, though relatively in-line with our estimate, as our checks have generally been constructive on 1Q trends. Similar to last quarter, FX remains a wildcard, but we believe Facebook should be able to grow through the incremental ~1-2 percent FX headwind since the company reported on 1/28, though currency could dampen the magnitude of upside potential. General sentiment around Facebook's stock appears positive and we believe the stock could be at least partially reflecting a solid quarter. That said, we continue to believe the company has multiple catalysts ahead, including video ads, off-network (via Atlas, FAN and LiveRail), Instagram monetization, and WhatsApp."

RBC Capital Markets: Outperform, $88 PT

Mark Mahaney and Rohit Kulkarni wrote:

"Facebook remains one of our top 3 Long recommendations in the Net Large Cap sector. FB's Q4 P&L & Metrics results were intrinsically very strong. We view the company correctly ramping up investments – from a position of strength –in many promising, high-growth areas (e.g. video – now at 3B daily video views vs. 1B in Q3). And those high growth areas represent Four Greenfield revenue opportunities (Instagram Monetization, Auto-Play Video Ads, FAN & WhatsApp) that can contribute well over $2B in incremental Rev in ‘15."

Facebook has over 1.3 billion active users, which the analysts note provide the company a unique and valuable asset of their social networking data. This can be exploited for ad and content targeting.

Related Link: Will Facebook's Mobile Revenue Per User Continue To Drop In Q1?

Deutsche Bank: Buy, $90 PT

Ross Sandler and Lloyd Walmsley wrote:

"Our checks point to solid results in 1Q, fueled by continued growth in video and core newsfeed monetization, with additional modest progress at Instagram, and we are expecting another quarter of largely in-line results. Looking at FY15, much of the excitement around FB's opportunities are captured in consensus estimates, but one that we think could surprise to the upside is the new Dynamic Product Ads program launched in Feb and should start to move the needle in 2H based on preliminary checks. Current DR advertisers testing the ads are showing huge lift in spend. We would add to positions into the print, but are not expecting meaningful revenue upside."

Oppenheimer: Outperform, $100 PT

Jason Helfstein and Kevin Gallagher wrote:

"We expect strong 1Q results, driven by higher mobile engagement and strong monetization. Checks suggest better 1Q sequential trends in social spend vs. the prior year, as improved targeting offsets traditional seasonality. Advertisers up 2x+y/y (Feb. '14 vs. Apr. '14), and share of US mobile Internet +150 bps y/y. 1Q US minutes +30 percent y/y, vs. +32 percent in 4Q, modestly above our prior 29% estimate. We now forecast currency hurting 1Q/2Q revs by 7 percent/9 percent vs. 5 percent previously. Street ests appear conservative for expense growth, as 4Q:14 headcount increased "only" 45 percent vs. 55 percent est. in 1Q. Deeper ad-tech stack, Facebook Audience Network (FAN) and video could provide upside to estimates."