In a report published Wednesday, Tigress Financial Partners Director of Research Ivan Feinseth downgraded shares of Facebook FB from Buy to Neutral on growth rate and monetization concerns.
The analyst commented on the heightened execution risks of new acquisitions and the "elevated" valuation metrics. Despite Facebook's strong business performance, Feinseth remarked that the company is fully valued at an EV/EP ratio of 70.4X.
In addition, "concerns regarding FB's monetization of WhatsApp and Instagram may be an overhang for shares." Tigress reported that the $19 billion acquisition of WhatsApp, was a "peak" valuation of the company that was sought to gain scale and user growth.
The firm concluded that active user growth rates for Facebook, a key metric that the company focuses on, may have plateaued. Feinseth noted that DAU and MAU metrics peaked in 4Q12 and 1Q13.
Shares of Facebook closed at $62.76 on Tuesday. The stock is up about 1.8 percent Wednesday.
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