Shares of Facebook were falling 5.6% to $76.25 in pre-market trading.
The analyst firm raised its EPS estimates for the social networker for 2015, but lowered its 2015 EPS estimates. JMP analysts expect Facebook to report earnings of $1.60 a share for 2014, up from $1.58. The analyst firm lowered it s 2015 EPS estimates to $1.61 a share from $1.97 a share.
"Facebook now expects to grow operating expenses by 50-70% next year, resulting in an incremental ~$1.2 billion in spend relative to our projections," JMP analysts Ronald V. Josey, Andrew Boone, Michael Wu, and Ignatius Njoko wrote.
The analysts continued, "While the size and dollar amount of these incremental costs came as a surprise to us, after updating our model, we believe Facebook remains one of the strongest and fastest growing platforms on the Internet, and 3Q14 was a very good quarter for the company, in our view."
TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."
You can view the full analysis from the report here: FB Ratings Report