A sigh of relief after Facebook gains, but not everyone is convinced

After the catastrophic forecast of Facbeook Inc. over the summer, the company's mixed third-quarter comments seemed pretty good.

The social media giant had warned investors in July to expect a sharp deceleration in their revenues thanks to the slowdown in growth around the Facebook core.

FB + 3.99%

platform and the sub-monetization of ephemeral stories content, which is gaining popularity. At the same time, the company predicted that spending on measures to improve the health of the Facebook platform could weigh on margins.

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Facebook's comments this time were not optimistic, but they painted a slightly more optimistic picture. The company, for example, now expects revenue growth to decline by 1 to 5 percent, compared with the high-single-digit forecast the company reported a few months earlier. And while user trends in the United States and Canada were rather unimpressive, the company improved the monetization of this user base.

Investors appeared to sigh with relief after the company's earnings call, sending shares up 2.6% Wednesday at midday, after a surging performance after hours.

"We would buy Facebook shares after the third quarter results and see Street estimates reset accordingly, which would allow the talk to stabilize on the Facebook core, a potential re-acceleration related to the use and to the monetization of Stories, to a rapid rise in messaging monetization and to a path to stable margins starting in 2019, "wrote Lloyd Walmsley, an analyst at Deutsche Bank, who credits the action a purchase target of $ 195, up from $ 192 before.

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All are not yet sold on the ability of society to regain its former glory. "These results correspond to the current situation, in our opinion, which is a good thing," wrote Instinet's Mark Kelley, who has a neutral equity rating and reduced his target to $ 161, from $ 183. at $ 161. "What keeps us on the sidelines, though, is the ongoing debate around the 30% margin target of the long-term operating margin, even if the forecasts suggest it, so that we can reach faster than expected.

Michael Nathanson, an analyst with MoffettNathanson, had similar concerns, referring to "several significant negative data points" from the report. First, it notes that the company's additional margins, a measure reflecting the profitability of new business, were 19% in the third quarter, compared to 37% in the second quarter and 60% the previous year.

"It's hard to believe that Facebook released a 50% GAAP margin last year," Nathanson wrote. "Clearly these days are gone."

Nathanson also pointed out that the company's operating profit increased only 13% in the third quarter. It expects a 7% increase in the fourth quarter and questions the appropriate multiple for a company whose operating income only grows by 7%.

"In order for us to become more positive here, we want to see a revival of revenue growth thanks to the better monetization of Stories," he wrote. "Until then, the stock will likely be stuck in the purgatory of growth, as spending and OIs are squeezed by high spending levels."

Read: The stock of snapshots falls after the reduction of the user base, but the new ad formats are gaining ground

BMO Capital Markets analyst Daniel Salmon lowered his stock price target from $ 190 to $ 175 and reduced estimates based on the company's latest outlook. While third-quarter numbers help "lay the groundwork for a more proactive thesis," Salmon expects more positive data points from advertisers before changing its market performance rating.

Jefferies analyst Brent Thill maintained his purchase price and course target of $ 200 in a client note titled "Not as sinister as fear, but ghosts remain".

Thill anticipates a deceleration in growth over the next year and a further compression of margins, but his overall vision is optimistic. "In the longer term, this looks like a mature and sustainable business with continued growth opportunities around Messenger / WhatsApp and other investments beyond 2020," wrote Thill.

Facebook shares fell 17% in the last 12 months, while the S & P 500 index

SPX, + 1.62%

gained 5.4%.