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Facebook (FB) and Netflix (NFLX) Near 52-Week Highs, Should You Buy?
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Two of the market’s most notable tech companies—social media giant Facebook and video streaming leader Netflix (NFLX - Free Report) —are gaining on Friday, sending both stocks near their 52-week highs. With earnings season approaching quickly, many investors are wondering which of these two is most likely to carry its momentum through its earnings announcement.
Climbing Higher
On Friday, shares of Netflix were up $3.53, or 2.73%, as of 11:45 AM EST. At the same time, Facebook was up $2.43, or 1.92%. Netflix is poised to hit its 52-week high of $133.88 soon, and Facebook is also nearing the top of its 52-week range at $133.50.
Although technology stocks took a beating after the election, it seems that Trump-related fears in the sector have cooled off, especially for companies like Facebook and Netflix that do not rely on an international supply chain.
Netflix is set to report earnings next week, while Facebook will announce its results on February 1. Both companies will be carrying a lot of momentum into their earnings releases, but current trends point to one as a clear favorite to come out on top this quarter.
Earnings Whispers
Earnings ESP (Expected Surprise Prediction) is Zacks' proprietary methodology for determining which stocks have the best chance to surprise with their next earnings announcement. By comparing a company’s most recent earnings estimates with the rest of its estimates and coupling that with a strong Zacks Rank, we are able to more accurately identify stocks that will post beats.
With that in mind, Facebook emerges as the frontrunner here. The company has not only seen its Zacks Consensus Estimate for earnings gain three cents over the past 60 days, but its Most Accurate Estimate is also six cents higher than its ZCS, giving it an Earnings ESP of 5.36%. Facebook is also a Zacks Rank #1 (Strong Buy).
Overall, our current consensus estimates point to EPS growth of nearly 90% on revenue growth of 44% this quarter. Despite its insane growth over the past few years, all signs point to Facebook being able to continue that growth in the near term.
And while Netflix’s Earnings ESP currently stands at 0%, investors will almost certainly have at least something to cheer about next week. Our current consensus estimate would represent EPS growth of 89% on sales growth of 35%.
For Netflix investors, the future will be based on whether or not the company’s massive investments in original programming will continue to pay off.
For all investors with a tech focus, the incoming administration and its campaign promises may present some concerns, but that shouldn’t discredit otherwise strong fundamentals in an overall bull market.
Also, don't forget to check out this week's episode of the Zacks Friday Finish Line, a news roundup style podcast featuring Zacks writers:
Which Stocks are Zacks Experts Talking About?
Stocks in today's headlines may be tempting buys, but how would you like to peek behind the curtain to see all the best stocks Zacks' team of experts are recommending? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF and options moves...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). Click here for all Zacks trades >>
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Facebook (FB) and Netflix (NFLX) Near 52-Week Highs, Should You Buy?
Two of the market’s most notable tech companies—social media giant Facebook and video streaming leader Netflix (NFLX - Free Report) —are gaining on Friday, sending both stocks near their 52-week highs. With earnings season approaching quickly, many investors are wondering which of these two is most likely to carry its momentum through its earnings announcement.
Climbing Higher
On Friday, shares of Netflix were up $3.53, or 2.73%, as of 11:45 AM EST. At the same time, Facebook was up $2.43, or 1.92%. Netflix is poised to hit its 52-week high of $133.88 soon, and Facebook is also nearing the top of its 52-week range at $133.50.
Although technology stocks took a beating after the election, it seems that Trump-related fears in the sector have cooled off, especially for companies like Facebook and Netflix that do not rely on an international supply chain.
Netflix is set to report earnings next week, while Facebook will announce its results on February 1. Both companies will be carrying a lot of momentum into their earnings releases, but current trends point to one as a clear favorite to come out on top this quarter.
Earnings Whispers
Earnings ESP (Expected Surprise Prediction) is Zacks' proprietary methodology for determining which stocks have the best chance to surprise with their next earnings announcement. By comparing a company’s most recent earnings estimates with the rest of its estimates and coupling that with a strong Zacks Rank, we are able to more accurately identify stocks that will post beats.
With that in mind, Facebook emerges as the frontrunner here. The company has not only seen its Zacks Consensus Estimate for earnings gain three cents over the past 60 days, but its Most Accurate Estimate is also six cents higher than its ZCS, giving it an Earnings ESP of 5.36%. Facebook is also a Zacks Rank #1 (Strong Buy).
Overall, our current consensus estimates point to EPS growth of nearly 90% on revenue growth of 44% this quarter. Despite its insane growth over the past few years, all signs point to Facebook being able to continue that growth in the near term.
And while Netflix’s Earnings ESP currently stands at 0%, investors will almost certainly have at least something to cheer about next week. Our current consensus estimate would represent EPS growth of 89% on sales growth of 35%.
For Netflix investors, the future will be based on whether or not the company’s massive investments in original programming will continue to pay off.
For all investors with a tech focus, the incoming administration and its campaign promises may present some concerns, but that shouldn’t discredit otherwise strong fundamentals in an overall bull market.
Also, don't forget to check out this week's episode of the Zacks Friday Finish Line, a news roundup style podcast featuring Zacks writers:
Which Stocks are Zacks Experts Talking About?
Stocks in today's headlines may be tempting buys, but how would you like to peek behind the curtain to see all the best stocks Zacks' team of experts are recommending? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF and options moves...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). Click here for all Zacks trades >>