NEW YORK (TheStreet) -- Shares of Facebook (FB) - Get Report were lower in mid-afternoon trading on Monday as Wells Fargo analysts say the social networking giant's recent move to bust ad blocking on its desktop site shows how much the software hurts the segment.
While desktop ads only generate 15% of Facebook's ad revenue, the firm said it seems ad blockers are beginning to have a "material impact" on desktop results as evidenced by Facebook's latest move, Barron's reports.
However, Wells Fargo added that Facebook is one of the most well-positioned players to offset losses from ad block plugins, due to the "broad adoption" of Facebook's app.
The company announced last week that it would be changing the way advertisements load on their desktop site in order to make ad units more difficult for blockers to detect.
VP of Facebook's ads and business platform Andrew Bosworth reiterated that the company is "ad supported" and that "ads are a part of the Facebook experience; they're not a tack on."
Boenning & Scattergood said Facebook may be trying to skirt ad-blockers by making the html code of its organic content indistinguishable from its web ads, according to Barron's. At the same time, Facebook is giving its users more options to control their ad experience by giving them the option to opt out of ad targeting categories, among other services.
Facebook is trying to address consumers' desire for using an ad-blocker by making their ads less disruptive, faster and more secure, Boenning & Scattergood added.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate FACEBOOK INC as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: