Facebook Inc. faces “one of the biggest risks” among large internet companies as the earnings season approaches, while Uber Technologies Inc. and Netflix Inc. appear to be among the least risky games in the world. over the next few months, according to an analyst.

Mark Mahaney from Evercore ISI added Facebook FB,
-1.15%
to his list of “tactical underperformance” Thursday night, while putting Uber UBER,
+ 2.28%
and Netflix NFLX,
-0.87%
on its “tactical outperformance” list. Facebook shares are down 1.2% in Friday trading, while Uber shares are up 3.2% and Netflix shares are almost flat.

Although Mahaney has an outperformance rating on Facebook, he has several concerns ahead of the company’s October 25 earnings report, in part reflecting the broader concerns he has about the online advertising landscape. On the one hand, internet companies benefited greatly from the surge in e-commerce spending a year ago, but now they face tough comparisons with this booming growth.

“What was the engine of growth last year was the tough competitions this year,” he wrote.

Mahaney also sees “underestimated” risks arising from the changes made by Apple Inc. AAPL,
+ 0.75%
that give consumers more flexibility to opt out of ad targeting. Facebook was the “primary beneficiary” of Apple’s advertising identifiers that made it easier for the internet company to perform “high-precision targeting,” in its view, but now that consumers can opt out of such targeting, Facebook could see a more “playground level” compared to peers.

Another hot issue for Facebook is the growth in its spending, according to Mahaney. While consensus estimates predict spending growth of about 23% year-over-year in 2022, he expects “a more reasonable range to be 28-35%” and wrote that He “wouldn’t be surprised” to see Facebook offering advice similar to the 32% to 37% range the company has for 2021.

“While we think the buy-side models are already well above the 23% of the street, we think FB stocks could trade if they move towards 30% growth,” he said. -he writes.

Facebook stock was heading for a fifth consecutive weekly decline, which would be the longest streak of weekly losses since the five-week period ending in March 2020.

Opinion: Facebook investors, are you already starting to see a trend?

On Netflix, Mahaney is optimistic about the company’s fourth quarter content roster as the company is expected to release new seasons of hugely popular series, including The witcher, Money theft, King tiger, and Emilie in Paris. At the same time, Walt Disney Co. DIS,
+ 1.18%
recently called the COVID-related production impacts, which hit Mahaney as “a potential indication of more moderate competitive risks for Netflix from a content perspective.”

Netflix is ​​expected to release its third quarter results on October 19, after the closing bell.

See Also: Netflix Says ‘Bridgerton’ Is Its Most-Watched Series Ever – But Maybe Not For Long

As for Uber, he wrote that the next earnings report slated for Nov. 4 looks “risk-free” as the company recently gave updated guidance. He also wrote that the fourth quarter is shaping up to be “a potential ‘show me’ quarter,” given that stocks have still been down since the start of the year, even as the company is recovering.

“[W]We believe that the recent investments in the company’s subscription business and the new vertical expansion will prove more resilient demand trends in the context of a full mobility recovery, with “excess profitability” largely behind us, this which will result in significant appreciation in stocks over the next six months, ”Mahaney wrote.

He rates Netflix and Uber stocks as outperforming.

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