While Facebook Inc. reported "good" fourth-quarter 2016 results, Pivotal Research Group analyst Brian Wieser downgraded his rating on company shares to "Hold" from "buy," noting that the company's 2017 guidance on expense growth and capital expenditures was higher than the research firm previously forecast.
The analyst, who lowered his price target on the company stock to $135 from $147, said in a research note that he continues to expect that "2017 figures will represent plateaus against which future year expense and capex growth will continue, reducing long-term margins and cash outflows vs. our prior model."
In the fourth quarter of 2016, Facebook reported total revenue of $8.81 billion, up 51% from $5.84 billion in the year-ago period. Facebook reported net income of $3.57 billion for the fourth quarter 2016, or $1.21 per share, up from $1.56 billion, or 54 cents per share, in the prior-year period. On a non-GAAP basis, net income was $4.15 billion, or $1.41 per share, up from $2.27 billion, or 79 cents a share, in the prior-year period.