A couple of analyst downgrades drove the shares of Facebook Inc(NASDAQ:FB) down more than 3 percent on Tuesday.
Bernstein Research downgraded the stock to Market Perform from Outperform and cut the price target to $27 from $33 a share.
Analyst Carlos Kirjner, who tracks the company, said that while mobile revenues showed growth in the fourth quarter, it did not grow as fast as expected. He also pointed out that the company’s advertising business presented significant untapped opportunities.
BTIG also downgraded the stock to Sell from Neutral, while keeping the price target the same at $22 a share.
BTIG’s Richard Greenfield said that the management of the company were still focussing on user engagement with the platform and was not analysing the total time people spent on the network as consumers shifted from computers to mobile devices.
Greenfield said that customers may be spending less time on the platform as they shifted more to accessing the platform on mobile devices.
People might be ending up just briefly touching Facebook rather than spending time on it, as happens when they access it on computers.
“Yet, the question Facebook has yet to answer is how mobile is affecting aggregate engagement, meaning total time spent on a monthly basis,” Greenfield said.
Facebook shares fell 89 cents, or 3.2 percent, to close at $27.37. The stock has fallen close to 12 percent so far this month after enjoying an upswing since last October. Facebook went public at $38 last May and has not hit that price since.
Meanwhile Vice President of Partnerships at Facebook Dan Rose told AllThingsD that the social networking platform had to find a balance between user experience and delivering the audience to its partners.
“At its core, what we’re really striving to do is find the perfect equilibrium from a great user experience and a strong platform that developers and partners will continue to invest in,” Rose said. “… We need to keep the news feed interesting, and one of the ways we do that is through media.”
He said that media content was all important in social networking platforms. “Media content deserves to be honoured and respected in the news feed.”