Facebook CEO Mark Zuckerberg Marlene Awaad | Bloomberg | Getty Images

On Facebook's last earnings call in October, CEO Mark Zuckerberg spoke excitedly about the company's growth opportunities in its Stories product, an important segue for investors who were focused on the disappointing revenue and user numbers. "I just think that this is the future," Zuckerberg told analysts. "The opportunity will be even bigger because it looks like Stories will be a bigger medium than Feed has been." Facebook is undergoing a major shift in how it generates revenue from advertisers. Instead of counting on ads sold across the site's core News Feed and the feed on Instagram, Facebook is gearing up to make more money from Stories, the user-generated photos and videos that take over an entire screen. Investors will be eagerly awaiting an update on how well that plan is working when Facebook reports fourth-quarter results after the closing bell on Wednesday. Analysts expect Facebook to report revenue growth of 26 percent to $16.4 billion, from $13 billion a year earlier, according to estimates compiled by Refinitiv. That would mark the slowest year-over-year growth for any quarter since Facebook's IPO in 2012. Net income likely increased to $2.19 a share from $1.44 a year earlier, when earnings were reduced by 77 cents a share due to changes in the tax code.

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There will be plenty of scrutiny around Facebook's user numbers following a year of repeated privacy scandals, which pushed the stock down 26 percent and led to questions about the long-term viability for a business model that's reliant on user engagement. The number of daily active users is expected to reach 1.52 billion, up from 1.4 billion a year earlier, with monthly active users probably climbing to 2.31 billion from 2.13 billion, according to analysts surveyed by FactSet. Average revenue per user is expected to come in at $7.11, according to FactSet, up from $6.18 a year ago. User engagement has been sluggish in some key markets. In Europe, the company's daily user count fell for the second quarter in a row in October, while the figure in the U.S. and Canada remained flat for the third-straight quarter. "Clients are concerned about engagement and certainly about the Instagram Stories transition," said Mizuho Securities analyst James Lee, who has a buy rating on the stock and a $200 price target. "We're probably looking at another quarter or two before this gets settled out." Facebook shares fell 2.2 percent on Tuesday to $144.19, but bounced back by about the same percentage in early trading Wednesday. They are up 9.9 percent in January.

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