Facebook Inc (NASDAQ:FB) has received its second downgrade in as many days, after BTIG research joined Sanford C. Bernstein on the list of firms downgrading the social media giant. Whether this list will grow any bigger remains to be seen as Facebook continues to cause jitters on the street, following a slowdown in the rate of member engagement. The analysts also noted that despite Facebook’s rising revenues, the increasing costs are likely to hurt margins and hence EBITDA.

In a report published Tuesday, February 12, BTIG research analysts, Richard Greenfield and Brandon Ross downgraded Facebook Inc (NASDAQ:FB) from a neutral Rating to Sell, with a price target of $22. I have been monitoring their ratings on Facebook and realize that since Facebook Inc (NASDAQ:FB) went public, the analysts have only upgraded the stock once, in November 2012, from Sell rating to Neutral rating. Additionally, in August, BTIG rated Facebook at Sell with the second lowest price target ever of $16, just behind BMO Capital Markets price of $15 the same month.

In the report, BTIG Research analysts wrote, ““We upgraded Facebook to Neutral in late November 2012 because we believed advertising revenues were set to notably exceed investor expectations, as we saw Facebook pushing a significantly higher ad load into users’ mobile news feed during Q4 2012. Since then, expectations for Facebook has risen notably, the company reported Q4 2012 revenues slightly above our estimates and talked of significantly higher than expected cost growth in 2013 impacting margins. While we are raising our revenue forecasts for 2013-2015, we are below consensus, especially in 2014, and our adjusted EBITDA estimates are even further below consensus. With revenue and EBTIDA growth set to disappoint, we believe a Sell rating is now warranted.”

Facebook-BTIG Downgrade

The analysts increased their revenue estimates for Full year 2013, and 2014 by five and one percentage points respectively. However, EBITDA was cut down from 20 percent to 13 percent for 2013, and from 13 percent to 12 percent in 2014 citing cost implications and impact on margins. The analysts ticked earnings per share to $0.50 and $0.52 for FY2013 and 2014 respectively, from $0.48 and $0.51 respectively.

Sanford C. Bernstein, on the other hand, noted in a report published yesterday, “Facebook management continues to focus investors on the increased ‘engagement’ with Facebook, as consumers shift from desktop usage to mobile usage. Simplistically, with a Facebook app on your phone with push notifications, consumers end up touching Facebook far more often as they transition to mobile usage.  Yet, the question Facebook Inc (NASDAQ:FB) has yet to answer is how mobile is affecting aggregate engagement, meaning total time spent on a monthly basis.  We suspect the more consumers shift to mobile, the less total time they are spending with Facebook Inc (NASDAQ:FB).  While the CPMs on mobile are significantly higher (you have to stare at the ads which are quite large relative to the screen size), we struggle to believe Facebook can continue to ramp the ad load on mobile the way they did in Q4 2012.” The firm downgraded Facebook from Outperform to Market perform and cut price targt from $33 to $27.

Facebook Inc (NASDAQ:FB) was trading at $27.55 at 2.42 p.m EST. down $0.72 per share or 2.53 percent decline from the closing price on Monday, February 11.