Analysis firm MoffettNathanson has downgraded Facebook’s stock following what they call a “toxic brew” of slowing sales and increased risk of regulation.

CNBC reports that analysis firm MoffettNathanson has downgraded Facebook’s stock in a surprise move after the firm predicted that the social media company will generate earnings below expectations this year. Analyst Michael Nathanson said in a note to clients this week: “We believe that revenue growth deceleration coupled with the company’s long-term margin guidance does not provide a meaningful near-term path for outperformance. Facebook is increasingly under the eye of global politicians and regulators, which will force the company to become more aggressive on spending to show contrition.” The analyst added, “The deceleration in growth, coupled with continued regulatory scrutiny, is a toxic brew for any stock.”

Since the firm’s note, Facebook stock has dropped by 3.2 percent. Nathanson lowered his Facebook stock price target from $200 to $175 — Facebook’s stock closed at $175.73 on Friday. Nathanson noted that Facebook provided lower operating profit margin guidance on their second-quarter earnings call stating that the margin will fall to the “mid-30s on a percentage basis” over the period of a few years. This is mainly due to increased costs for the company relating to security following their recent data breached and content review.

“We do not see outsized performance on the horizon as Facebook’s core platform is maturing and monetizing Stories may not be the runaway success needed in the near-term to pick up the slack,” Nathanson said. “Further, expenses are expected to stay elevated as Facebook plays catch-up to secure and refresh its platform.” Nathanson reduced his Facebook 2019 earnings per share estimate from $8.25 to $7.90, this is lower than the average Wall Street estimate of $8.22.

Facebook stock plummeted more than 20 percent in one day last month.