Facebook Inc FB is on deck to report fourth quarter earnings on Wednesday afternoon and the company's fairly consistent history of earnings beats is one reason to be optimistic. Another reason comes from Cantor's Youssef Squali.
Squali was recently on CNBC to share his expectations.
"We expect Facebook to grow somewhere in the 40 percent range and generate margins somewhere near 65 percent...we're going into the quarter feeling pretty good about numbers," Squali explained.
Instagram's impact, while still small compared to Facebook's total income statement, should be monitored. Instagram's revenue footprint is large enough to "move the needle" by the end of this year, Squali added.
The analyst previously wrote about what Instagram meant to Facebook in September, where he called the stock one of his favorite Internet stocks as the photo-sharing platform could surpass $1 billion in revenue by the end of 2016.
"Facebook has become to mobile [ads] what Google Search has become to mobile," because of its massive market share. "Facebook will end up dominating display spend on mobile." The company has turned a business that was thought to be a weakness at its IPO has become a key strength, Squali added.
Hours before Facebook's earnings, Cantor's tech analyst said it makes sense to buy before the report for those looking to own over the next 6 to 12 months.
Facebook is trading near $96.50 on Wednesday afternoon.
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