Netflix Inc. (NFLX) may be the first of the FANG stocks to report third-quarter earnings that surpassed Wall Street views, but it may not be the last. With Facebook Inc. (FB), Inc. (AMZN) and Alphabet Inc.’s Google (GOOG) gearing up to report quarterly earnings in upcoming days and weeks, Jefferies said, based on investor sentiment, Facebook has the highest chance of surprising on the upside.  

"[Facebook] has one of the easier set-ups for the 3Q print with Street estimates implying a 500bps​ deceleration in growth and the stock being up only ~2% since its last quarterly print," Jefferies analyst Brent Thill wrote in a research report covered by "Instagram will be a near-term driver of growth as it has nearly doubled the number of advertisers on the platform to [2 million] since March '17."

The bullish expectation on the part of Thill comes as Facebook has been hit with concerns about Russian-sponsored fake ads on its social media platform. While Facebook was used by the Russians to allegedly affect the U.S. and other elections around the globe, investors and Wall Street don’t seem to care, focusing more on its advertising revenue and user growth. Consider the performance in its stock since the end of September, when news started surfacing about how many Russian ads were purchased in the weeks and months leading up to the election. Shares are up close to 5%, even with the social network giant slated to testify before Congress on Nov. 1. (See also: Why Analysts Still Love Facebook Stock.)

Higher Numbers Expected

Amid the uproar, Wall Street has been busy raising their price targets and earnings estimates on the stock. They predict Facebook will get an even bigger piece of the online revenue pie and will see its user numbers continue to march higher. Take Deutsche Bank: At the end of September, it raised its price target to $220 from $215 and reiterated its buy rating on the stock. In a research report, analyst Lloyd Walmsley said Facebook’s dominant position in online advertising should enable it to beat Wall Street expectations on the revenue front next year. (See more: Wells Fargo's AI Bot Says Sell Facebook, Google.)

While Jefferies is upbeat about Facebook’s chances of surprising Wall Street and investors when it reports quarterly results, the same can’t be said for Amazon and Google, despite investor sentiment that leans that way. The analyst said Amazon should have a “mixed quarter” with revenues that beat expectations, but earnings that could miss by as much as $0.03 a share. "[Management] guidance for Q3 excluded the impact of Whole Foods and we believe that only half of sell-side analysts have updated their models to reflect the close of the acquisition on Aug 28th," he wrote in the note to clients. As for Google, he said it's not a sure bet the company will beat given the consensus calls for an acceleration of net revenue growth to 20%.


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