Earnings season is here. And that means the biggest players in the market are getting ready to release very important earnings reports.

One of those big players is Facebook (NASDAQ:FB). The social media giant is set to report second-quarter numbers after the bell on Wednesday. My research, corroborated by consensus Wall Street research and recent blowout numbers from Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), is that the numbers will be quite good. That means it is time to buy FB stock, right?

Not so fast. Earnings are as much about how good the numbers are as they are about how much is priced into the stock.

When it comes to FB stock, the numbers will be very good. But, a lot of that good seems priced into FB stock. FB stock is up more than 20% since its last earnings report. The forward multiple is at a 2018 high. The stock got a big bump from Google’s numbers. And, the stock is at all-time highs.

Thus, while I love FB stock for the long-term and also think the quarterly numbers will be very impressive, I am not expecting a huge jump in FB stock here and now. I think a lot of the upside from consensus numbers is already priced in.

Consequently, if you are looking at FB stock as an earnings play, I’m not convinced. But, if you are loading up on stocks for the long-term like me, then this is one of your best options, regardless of how the stock reacts after earnings.

Here’s a deeper look.

Facebook’s Q2 Numbers Will Be Very Good

All signs point to Facebook’s second-quarter earnings being a double beat report.

The big drivers? Improved ad pricing across the whole ecosystem and robust Instagram advertising growth.

Here are the numbers. Instagram crossed the 1 billion user mark in mid-June. The last update we got was in September, when Instagram had crossed the 800 million user mark. That implies that over the past year, Instagram has been growing its user base by roughly 35% year-over-year. Moreover, Instagram Stories crossed the 400 million daily users mark in late June, up 60% year-over-year.

Meanwhile, digital advertising research firm Kenshoo found that social media impressions grew in Q2 for the first time in a year (+14%), while Instagram ad spend doubled year-over-year. Goldman Sachs think those estimates are light. According to Goldman checks with ad partner Merkle, Instagram ad impressions tripled year-over-year in Q2 (versus doubling in Q1), while ad revenue rose 177% among North American clients. Goldman also points to strong ad pricing trends across all of social media.

Oh, and Google, Facebook’s most comparable digital advertising peer, reported blowout numbers.

Overall, it looks like Facebook will report a monster quarter — thanks mostly to Instagram and partly because of improved ad pricing trends.

Facebook Stock Has Come Very Far, Very Fast

It isn’t a sure thing, however, that those strong numbers will flow into a healthy reaction from FB stock.

I think FB stock is still materially undervalued here and now. Theoretically, then, strong numbers should help propel FB stock closer towards fair value.

But, in practice, stocks don’t go up in a linear fashion. And, FB stock is on the heels of one of its most vigorous rallies over the past several years. As such, even though the numbers will be really good, they may not be good enough for some recent buyers.

That is why I’m 50/50 on what FB stock will do after earnings. Half of me thinks the still-undervalued FB stock will rally on big numbers. The other half of me thinks that FB stock could be choppy, regardless of how good the numbers are.

What’s the investment takeaway? This isn’t the best pure “earnings play.” But, this is one of the best long-term holdings in the stock market.

Bottom Line on FB Stock

Instagram is dominating the social media scene right now, and that means Facebook is set to report blowout second-quarter numbers.

But, FB stock has already rallied in anticipation of this. As such, I’m not sure how much of a post-earnings pop we could see in FB stock. Long-term, though, this stock will continue to track materially higher.

As of this writing, Luke Lango was long FB.