4 Things to Watch for In the Facebook Earnings Report

The market gets one of its biggest potential fireworks show tomorrow after the bell, when the Facebook ( FB) earnings report is slated to arrive. And, as it seems to be the case every time, it'll have a lot of attention - FB stock holders and mere spectators alike.

Part of that is because FB stock itself has fallen into a swoon since peaking in March, falling about 13% since topping out around $73.

But part of that is also because social media stocks in general have taken a beating lately, including big plunges in top-notch players like Yelp ( YELP), Pandora ( P) and LinkedIn ( LNKD). However, as Facebook does help carry the ceremonial flag for the group, and does provide a bit of insight into what's working and what isn't, a good Facebook earnings report could help spark renewed strength in the sector.

So what can we expect from the Facebook earnings report? Let's take a look at what Wall Street might be (or should be) focusing on:

Facebook Earnings

It's a good assumption that we'll find out how much Facebook earned. That's why they call it an 'earnings report.'

Anyway, Wall Street is expecting Q1 revenues of $2.36 billion powering profits of 24 cents per share. The former number would represent nearly 62% growth year-over-year; the latter would be a doubling from last year's earnings.

The good news is that Facebook earnings have beaten expectations for several quarters now, the most recent of which - Facebook's late January report - really propelled FB stock.

This first-quarter report should be no exception. Facebook has effectively made a transition from the desktop to mobile - for example, during Q4, more than half of advertising revenues came from mobile - and the future of mobile looks promising. The market is expected to jump from $18 billion in 2014 to $41.9 billion by 2017, according to Gartner research. Given the massive scale of FB as well as the focus on ad quality, the company is likely to get an outsized share of the pie.

In fact, Credit Suisse ( CS) analyst Stephen Ju made a gutsy call this week to upgrade his rating on FB stock from 'neutral' to 'outperform' and raised his price target from $65 to $87 - 40% higher than current prices. In his report, he indicated that Wall Street has been underestimating the company's growth and that Q1 could be stronger than expected.

Monetization

Mark Zuckerberg has shown a real talent for turning his users into dollars. So on the Facebook earnings call, Wall Street will want to get a sense of how these efforts are proceeding.

Perhaps the most important thing to look for will be the mobile app installs. Essentially, Facebook makes money by serving up ads that allow users to download third-party apps, which has turned out to be a major driver for mobile.