Pivotal Research Group analyst Michael Levine said part of Facebook's advertising business 'just feels very unsustainable.'
The Facebook analyst who downgraded the stock Tuesday told CNBC he is concerned about the growth of the social media giant's advertising business.
"We're just looking at the sign posts that have been popping up over the last few months, and it just feels very unsustainable," he said on "Shares of Facebook closed down 2.76% at $207.19 on Tuesday following Pivotal's downgrade to sell from hold.
Levine said direct response advertisers — those that try to get people to act after seeing an ad, such as putting their name on an email list — are highly sensitive to return on investment. "If you've been paying $50 for a lead and all of a sudden that goes to $55, that's a problem," he said.. Facebook was expected to claim more than 20% of digital ad revenues by the end of last year, according to eMarketer.
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