Facebook: Color on qtr
* Pacific Crest highlighted the first sign of engagement issue. Daily active users (DAU) were 728 million and lower than the Street at 737 million. Facebook also confirmed that DAU among younger U.S. teens declined after refuting all engagement weakness in Q2. Teens are only 10% to 15% of the U.S. user base, but could signal the direction of early adopters. * RBC Capital Mkts raises its FB tgt to $60 from $52 noting positives: 1. Revenue Beat, 2. Rising User Engagement, 3. Mobile Now @ 49% Of Ad Revenue, and 4) Margins Surprise to the upside. Two EPS call "surprises" -- 1) Management commentary that it was seeing reduced engagement by young U.S. teens -- RBC's recent survey work makes it believe this risk has been over-stated by the market; and 2) Management commentary that it plans to cap Newsfeed ad loads for the foreseeable future -- RBC believes this view was consistent with prior Q2 EPS call comments and, therefore, not new nor a "surprise." * Stifel notes FB exceeded $2bn in total revenues for the first time, as mobile ad revenues neared half of total. The quarterly results, at the surface, were good enough to drive shares meaningfully higher, as revenues and EPS increase 8% and 23%, respectively, for 2014. But commentary that ruled out further increase in ad loads will limit the extent of follow through after a quarter in which the shares of FB had more than doubled (vs. S&P 500 up 5% in 3Q13). Tgt to $56 from $50. * CRT is raising its target from $52 to $57 on a strong 3Q. FB's reported 3Q Revenue, EBITDA & PF EPS of $2.01 billion, $1.26 billion, and $0.25, were well ahead of CRT/Street's $1.9 billion, $1.0 billion, and $0.18. Mobile was the highlight at 49% of total ad revenue or $881 million. OpEx leverage resulted in EBITDA margin of 62.5%, the highest seen since 4Q11. But management tempered expectations with plans to limit NewsFeed ad inventory going forward. * Canaccord raised its tgt to $62 from $60 on strong Q3 results, while noting the ad model * As mentioned earlier, FB was downgraded to Market Perform from Outperform at BMO Capital Mkts and upgraded to Buy from Hold at Pivotal Research. * FB was also defended at Bernstein, which would buy on any pull-backs. * After initially gapping higher on the print, FB is now flat in pre market at $48.89.