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The Zacks Analyst Blog Highlights: Netflix, Amazon, Apple, Alphabet and Facebook
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For Immediate Release
Chicago, IL – August 30, 2019 – 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: Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) and Facebook .
Here are highlights from Thursday’s Analyst Blog:
FAANG 52-Week Laggard: Facebook the One Bright Spot?
FAANG, as an aggregate, has been underperforming the broader market over the past 52-weeks with only one stock illustrating positive returns. Over the past 12 months, Netflix shares lost 19.4%, Amazon is down 10.5%, Apple shares fell 7.7%, and Alphabet is down 4.7%. Facebook, the one bright spot in FAANG, has been able to return shareholders 3.9% in the last 52-weeks.
Why have the treasured FAANG stocks been lagging in recent months of trading? Has the growth stopped, is this just function of valuation or can the recent soft performance be understood on an individual basis?
I discussed a couple of FAANG stocks that appear to have some fundamental flaws in my article Is FAANG Losing Its Allure? Below I’m going to discuss the strongest FAANG stock over the past 52-weeks and if it has the aptitude to continue its drive.
Facebook
Facebook has illustrated an unprecedented topline growth averaging over 50% year-over-year, and never falling under 26% quarterly expansion since FB went public 7 years ago. Analysts are expecting the company to expand its revenue by 26% and 22% this year and next, respectively.
Facebooks user growth appears to know no end with relentless quarter-over-quarter improvements in monthly active users (MAUs). There are currently over 2.4 billion humans who use Facebook on a monthly basis, and this doesn’t include its other portfolio services like Instagram, WhatsApp, Oculus. This means that over 50% of the internet accessing world check their Facebook account at least once a month. If Instagram and WhatsApp were added to this figure, the penetration would be closer to 100%.
User growth is soon going to be a product of world population growth, but this is not going to slow the firm’s growth. The company has been able to increase average revenue per user (ARPU) year-over-year consistently.
Libra
Now Facebook is preparing to take a plunge into the financial market with its development of a cryptocurrency. Facebook is partnering with 28 other firms ranging from financial service companies to ride-sharing firms like Uber in the Libra Association.
Libra is going to be quite different from other cryptocurrencies for several reasons. One, it’s not entirely decentralized, it puts its confidence in the 28 accredited members of the Libra Association who will act as the “central bank” of the coin. This will hinder illegal activity with the currency. Libra is also going to be backed by a basket of currencies and US treasuries making it a “stable-coin”. Being asset-backed, Libra won’t have the volatility of bitcoin or ethereum, and owners will have the comfort of being backed by real assets.
This project could be a very profitable endeavor for FB if it can properly execute its new digital wallet for Libra, Calibra. This wallet will be available to anyone with an internet connection. Libra will be accessible in Facebook Messenger, WhatsApp, and as a standalone app.
Facebook, Facebook Messenger, and WhatsApp are the top three downloaded smartphone apps giving this financial services access and tremendously large consumer base right out of the gates. Libra could become the international currency that changes the financial markets.
Valuation
FB’s forward P/E has dropped substantially over the last 5 years, from its high of 61x in 2015 to the 21.5x that it is trading at today. This is an inevitable trend as the firm matures and the excessive growth decelerates. If Libra takes off globally when it is released next year, I am confident that FB will be thrown right back into high growth multiples.
Take Away
If you are a believer in Facebooks stable-coin, Libra, FB is a buy right now. Libra aside, FB still has a convincing narrative with reasonable multiples. It continues to prove me wrong about its ability to see relentless user growth, and I am done fighting the trend.
FB has run up over 40% in 2019 so far, but it is still over 15% off its 2018 highs. If Facebook can avoid any further regulatory run-ins and it can continue its consistent ARPU growth, I am certain that it will make new highs.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Netflix, Amazon, Apple, Alphabet and Facebook
For Immediate Release
Chicago, IL – August 30, 2019 – 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: Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) and Facebook .
Here are highlights from Thursday’s Analyst Blog:
FAANG 52-Week Laggard: Facebook the One Bright Spot?
FAANG, as an aggregate, has been underperforming the broader market over the past 52-weeks with only one stock illustrating positive returns. Over the past 12 months, Netflix shares lost 19.4%, Amazon is down 10.5%, Apple shares fell 7.7%, and Alphabet is down 4.7%. Facebook, the one bright spot in FAANG, has been able to return shareholders 3.9% in the last 52-weeks.
Why have the treasured FAANG stocks been lagging in recent months of trading? Has the growth stopped, is this just function of valuation or can the recent soft performance be understood on an individual basis?
I discussed a couple of FAANG stocks that appear to have some fundamental flaws in my article Is FAANG Losing Its Allure? Below I’m going to discuss the strongest FAANG stock over the past 52-weeks and if it has the aptitude to continue its drive.
Facebook
Facebook has illustrated an unprecedented topline growth averaging over 50% year-over-year, and never falling under 26% quarterly expansion since FB went public 7 years ago. Analysts are expecting the company to expand its revenue by 26% and 22% this year and next, respectively.
Facebooks user growth appears to know no end with relentless quarter-over-quarter improvements in monthly active users (MAUs). There are currently over 2.4 billion humans who use Facebook on a monthly basis, and this doesn’t include its other portfolio services like Instagram, WhatsApp, Oculus. This means that over 50% of the internet accessing world check their Facebook account at least once a month. If Instagram and WhatsApp were added to this figure, the penetration would be closer to 100%.
User growth is soon going to be a product of world population growth, but this is not going to slow the firm’s growth. The company has been able to increase average revenue per user (ARPU) year-over-year consistently.
Libra
Now Facebook is preparing to take a plunge into the financial market with its development of a cryptocurrency. Facebook is partnering with 28 other firms ranging from financial service companies to ride-sharing firms like Uber in the Libra Association.
Libra is going to be quite different from other cryptocurrencies for several reasons. One, it’s not entirely decentralized, it puts its confidence in the 28 accredited members of the Libra Association who will act as the “central bank” of the coin. This will hinder illegal activity with the currency. Libra is also going to be backed by a basket of currencies and US treasuries making it a “stable-coin”. Being asset-backed, Libra won’t have the volatility of bitcoin or ethereum, and owners will have the comfort of being backed by real assets.
This project could be a very profitable endeavor for FB if it can properly execute its new digital wallet for Libra, Calibra. This wallet will be available to anyone with an internet connection. Libra will be accessible in Facebook Messenger, WhatsApp, and as a standalone app.
Facebook, Facebook Messenger, and WhatsApp are the top three downloaded smartphone apps giving this financial services access and tremendously large consumer base right out of the gates. Libra could become the international currency that changes the financial markets.
Valuation
FB’s forward P/E has dropped substantially over the last 5 years, from its high of 61x in 2015 to the 21.5x that it is trading at today. This is an inevitable trend as the firm matures and the excessive growth decelerates. If Libra takes off globally when it is released next year, I am confident that FB will be thrown right back into high growth multiples.
Take Away
If you are a believer in Facebooks stable-coin, Libra, FB is a buy right now. Libra aside, FB still has a convincing narrative with reasonable multiples. It continues to prove me wrong about its ability to see relentless user growth, and I am done fighting the trend.
FB has run up over 40% in 2019 so far, but it is still over 15% off its 2018 highs. If Facebook can avoid any further regulatory run-ins and it can continue its consistent ARPU growth, I am certain that it will make new highs.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.