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The Zacks Analyst Blog Highlights: Facebook, Apple, Citigroup and Tesla
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For Immediate Release
Chicago, IL – November 1, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook Inc. , Apple Inc. (AAPL - Free Report) , Citigroup Inc. (C - Free Report) and Tesla Inc (TSLA - Free Report) .
Facebook vs. Apple: Which Is Better Ahead of Earnings?
It seems tech bigwigs are waiting out the Halloween period to report their quarterly figures. Investors are making positions in such stocks despite persistent concerns that the tech trade has become “crowded.”
And why not? Tech has come a long way, evolving from the dot-com catastrophe to become one of the modern market’s most coveted sectors. Also, the White House’s initiative to trim tax rates is providing the much-needed windfall to such companies that have mostly hoarded money outside the United States.
America’s biggest social networking service provider, Facebook Inc., is scheduled to report earnings on Nov. 1, and Apple Inc. will release its results on Nov. 2.
Facebook is expected to score big this earnings season, courtesy of an increase in ad revenues. A Citigroup Inc. research report showed that the Internet giant will see a 47% year-over-year increase in ad revenues in the third quarter. If that happens, the company will likely be able to beat analysts’ predictions again.
Facebook’s mobile and live video efforts continue to pay off, with Instagram emerging as an important revenue stream. Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – coupled with a huge user base are expected to drive growth. Thus, the company sports a Zacks Rank #1 (Strong Buy).
Coming to Apple, management expects growth in iPhone revenues in the fiscal fourth quarter. The world’s most valuable publicly-traded company’s enriched product portfolio, which now includes Watch 3 and 4K TV, will also help its shares gain momentum. The company’s $1-billion investment for acquiring original content and its plan to foray into the film distribution market will boost revenues further. Right now, the company has a Zacks Rank #2 (Buy) (read more: Fresh Slice of Apple This Week: Global Week Ahead).
Let us now quickly have a look at how these bellwethers are stacked against each other. You can see the complete list of today’s Zacks #1 Rank stocks here. Other major earnings releases during this period include that of Tesla Inc, formerly Tesla Motors, Inc.
Price Performance
Facebook and Apple have been strong performers this year, handily beating the S&P 500’s gain of 15%.
However, with an increase of 56.3% year to date, Facebook has rallied past Apple’s gain of 43.9%.
Valuation
Here, we are considering the stocks’ Price to Earnings Growth (PEG) ratios in order to evaluate them from a valuation perspective. This is the most appropriate ratio since it takes into account the earnings potential of the companies.
With a PEG ratio of 1.27, Apple is undervalued when compared to the S&P 500’s 1.93. However, Facebook is significantly undervalued, since its PEG is 1.11.
Gross Margin
Compared to other industries, tech companies have relatively higher gross margin levels. This is particularly true for stocks with higher brand value.
But Apple scores low in this parameter as its gross margin TTM is 38.5% compared to the S&P 500’s 48.5%. Facebook excels in profitability, with a gross margin TTM of 86.5%.
Dividend Yield
Facebook doesn’t provide a dividend, while Apple has offered a dividend yield of 1.51% over the previous one-year period.
However, this is way less than the yield provided by the broader market in the same period, which is 1.84%.
Earnings History, ESP and Estimate Revisions
Facebook and Apple have delivered positive surprises in the trailing four quarters. However, Facebook’s average beat of 11.3% steers past Apple’s level of 3.8%.
Facebook, in the meanwhile, is projected to earn $1.30 per share on $9.88 billion in revenues, up 19.5% and 40.9% from the year-earlier level, respectively. Apple is also expected to rake in $1.86 per share on $51.17 billion, up from $1.66 on $46.56 billion in the year-earlier period (read more: All-Around Strength in Q3 Earnings Season).
When it comes to Earnings ESP, Apple is a clear winner with +1.17% against Facebook’s -3.68%.
To Conclude
The online social media company holds an edge over the iPhone maker when it comes to price performance, fundamental valuation and gross margin.
On top of this, Facebook’s year-over-year earnings per share growth is expected to surpass Apple’s in the said quarter. This is also evident from Facebook’s impressive surprise history in the last year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Facebook, Apple, Citigroup and Tesla
For Immediate Release
Chicago, IL – November 1, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook Inc. , Apple Inc. (AAPL - Free Report) , Citigroup Inc. (C - Free Report) and Tesla Inc (TSLA - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Facebook vs. Apple: Which Is Better Ahead of Earnings?
It seems tech bigwigs are waiting out the Halloween period to report their quarterly figures. Investors are making positions in such stocks despite persistent concerns that the tech trade has become “crowded.”
And why not? Tech has come a long way, evolving from the dot-com catastrophe to become one of the modern market’s most coveted sectors. Also, the White House’s initiative to trim tax rates is providing the much-needed windfall to such companies that have mostly hoarded money outside the United States.
America’s biggest social networking service provider, Facebook Inc., is scheduled to report earnings on Nov. 1, and Apple Inc. will release its results on Nov. 2.
Facebook is expected to score big this earnings season, courtesy of an increase in ad revenues. A Citigroup Inc. research report showed that the Internet giant will see a 47% year-over-year increase in ad revenues in the third quarter. If that happens, the company will likely be able to beat analysts’ predictions again.
Facebook’s mobile and live video efforts continue to pay off, with Instagram emerging as an important revenue stream. Apart from mobile and video, the monetization opportunities of the company’s other subsidiaries – Messenger, WhatsApp and Oculus – coupled with a huge user base are expected to drive growth. Thus, the company sports a Zacks Rank #1 (Strong Buy).
Coming to Apple, management expects growth in iPhone revenues in the fiscal fourth quarter. The world’s most valuable publicly-traded company’s enriched product portfolio, which now includes Watch 3 and 4K TV, will also help its shares gain momentum. The company’s $1-billion investment for acquiring original content and its plan to foray into the film distribution market will boost revenues further. Right now, the company has a Zacks Rank #2 (Buy) (read more: Fresh Slice of Apple This Week: Global Week Ahead).
Let us now quickly have a look at how these bellwethers are stacked against each other. You can see the complete list of today’s Zacks #1 Rank stocks here. Other major earnings releases during this period include that of Tesla Inc, formerly Tesla Motors, Inc.
Price Performance
Facebook and Apple have been strong performers this year, handily beating the S&P 500’s gain of 15%.
However, with an increase of 56.3% year to date, Facebook has rallied past Apple’s gain of 43.9%.
Valuation
Here, we are considering the stocks’ Price to Earnings Growth (PEG) ratios in order to evaluate them from a valuation perspective. This is the most appropriate ratio since it takes into account the earnings potential of the companies.
With a PEG ratio of 1.27, Apple is undervalued when compared to the S&P 500’s 1.93. However, Facebook is significantly undervalued, since its PEG is 1.11.
Gross Margin
Compared to other industries, tech companies have relatively higher gross margin levels. This is particularly true for stocks with higher brand value.
But Apple scores low in this parameter as its gross margin TTM is 38.5% compared to the S&P 500’s 48.5%. Facebook excels in profitability, with a gross margin TTM of 86.5%.
Dividend Yield
Facebook doesn’t provide a dividend, while Apple has offered a dividend yield of 1.51% over the previous one-year period.
However, this is way less than the yield provided by the broader market in the same period, which is 1.84%.
Earnings History, ESP and Estimate Revisions
Facebook and Apple have delivered positive surprises in the trailing four quarters. However, Facebook’s average beat of 11.3% steers past Apple’s level of 3.8%.
Facebook, in the meanwhile, is projected to earn $1.30 per share on $9.88 billion in revenues, up 19.5% and 40.9% from the year-earlier level, respectively. Apple is also expected to rake in $1.86 per share on $51.17 billion, up from $1.66 on $46.56 billion in the year-earlier period (read more: All-Around Strength in Q3 Earnings Season).
When it comes to Earnings ESP, Apple is a clear winner with +1.17% against Facebook’s -3.68%.
To Conclude
The online social media company holds an edge over the iPhone maker when it comes to price performance, fundamental valuation and gross margin.
On top of this, Facebook’s year-over-year earnings per share growth is expected to surpass Apple’s in the said quarter. This is also evident from Facebook’s impressive surprise history in the last year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.