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The Zacks Analyst Blog Highlights: Netflix, Apple, Facebook, Amazon.com and Alphabet
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For Immediate Release
Chicago, IL – April 24, 2020 – 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, Inc. (NFLX - Free Report) , Apple Inc. (AAPL - Free Report) , Facebook, Inc. , Amazon.com, Inc. (AMZN - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Will FAANG Stocks Steal the Show This Earnings Season, As Well?
As Wall Street’s tech behemoths gear up to post first-quarter earnings results, all eyes are particularly on the FAANG group (Facebook, Apple, Amazon, Netflix and Alphabet-owned Google). FAANG’s stellar market value determines the movement of the stock market, and thus any upsetting outcome will have far-reaching consequences.
But despite an anticipated ugly earnings season, the FAANG group has got off to a flying start. Netflix, Inc.’s blowout results, with doubling of the subscriber base, have been cheered by investors. Widespread lockdowns in the wake of the coronavirus outbreak have compelled people to find ways of entertainment at home. Netflix reported 15.77 million new subscribers globally in the first quarter, way higher than its projected 7 million. The company’s executives confirmed in a letter to shareholders that “during the first two months of the Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada], and then with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.”
Netflix’s earnings per share came in at $1.57, soaring from76 cents a share a year ago. Revenues rose to$5.77 billion from $4.52 billion in a year ago. The Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current year is 45.8% against the Broadcast Radio and Television industry’s estimated decline of 2.1%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let us, thus, focus on the upcoming earnings reports of the remaining FAANG stocks.
iPhone maker Apple Inc. is scheduled to report second-quarter fiscal 2020 earnings on Apr 30, after market close. The coronavirus pandemic forced Apple to shut down its own as well as partners’ stores, which has certainly impacted revenues. Apple’s supply also got disrupted due to slower-than-expected return to work in China after an extended New Year holiday aimed at curtailing the spread of the deadly virus. What’s more, the virus spread in the United States toward the end of March, which has most likely hurt sales.
Thus, analysts expect Apples revenues to decline year over year. But the company’s progress with5G, content, software services, wellness and augmented reality might have boosted earnings. In fact, the Zacks Rank #3 (Hold) company has an Earnings ESP of +0.51%. This is our proprietary methodology for determining stocks that have the best chance to positively surprise with their upcoming earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Before Apple, Facebook, Inc. will be reporting first-quarter results on Apr 29, after market close. The social media giant’s revenues increased 25% year over year in the fourth quarter of 2019. However, management said that it expects year-over-year revenue growth in the first quarter to “decelerate by a low to mid single-digit percentage point as compared to Q4 growth rate.” Now, that’s before the pandemic had hit global markets. Not surprisingly, analysts now expect a much slower revenue growth than management’s predictions.
By the way, advertising revenues account for almost all of Facebook’s revenues. Lest we forget, the company’s ad auction prices tanked 20% in both February and March. To make matters worse, ad agencies noted steep decline in conversion rates, which measure what steps people are taking after clicking on an ad. This might dent the Zacks Rank #3 company’s first quarter profit margins.
Coming to e-commerce giant Amazon.com, Inc., there is no doubt that it is making the most of the shift in consumer preference caused by the pandemic. With many stores closed across the United States and Americans not willing to venture out, Amazon’s sales have skyrocketed.
The current work-from-home scenario has increased the need for cloud storage, something that bodes well for Amazon Web Services. Thus, the Zacks Rank #2 company’s cloud sales are likely to have risen in the quarter to be reported. In fact, Amazon expects overall revenues at $73.3 billion for the quarter ended March 2020, suggesting an increase of22.8% from the year-ago period. Profits of $6.35 per share are anticipated for the first quarter, indicating as light drop from $7.09 reported a year ago.
Last but actually next up, Alphabet Inc. is scheduled to report earnings for the quarter ended March 2020 on Apr 28, after market close. And we certainly expect mixed results! Alphabet’s strengthening cloud unit has been aiding substantial revenue growth. Thus, the company’s revenues for the first three months of this year are expected at $33.3 billion, suggesting an improvement from year-ago sales of $29.48 billion.
However, the Zacks Rank #3 company may face a drop in profits as it had banned advertisements related to sensitive issues like coronavirus during the first quarter. The Google-parent company’s expected earnings per share for the first quarter is $11.16, calling for a decline from $11.90 reported during the same period last year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Netflix, Apple, Facebook, Amazon.com and Alphabet
For Immediate Release
Chicago, IL – April 24, 2020 – 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, Inc. (NFLX - Free Report) , Apple Inc. (AAPL - Free Report) , Facebook, Inc. , Amazon.com, Inc. (AMZN - Free Report) and Alphabet Inc. (GOOGL - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Will FAANG Stocks Steal the Show This Earnings Season, As Well?
As Wall Street’s tech behemoths gear up to post first-quarter earnings results, all eyes are particularly on the FAANG group (Facebook, Apple, Amazon, Netflix and Alphabet-owned Google). FAANG’s stellar market value determines the movement of the stock market, and thus any upsetting outcome will have far-reaching consequences.
But despite an anticipated ugly earnings season, the FAANG group has got off to a flying start. Netflix, Inc.’s blowout results, with doubling of the subscriber base, have been cheered by investors. Widespread lockdowns in the wake of the coronavirus outbreak have compelled people to find ways of entertainment at home. Netflix reported 15.77 million new subscribers globally in the first quarter, way higher than its projected 7 million. The company’s executives confirmed in a letter to shareholders that “during the first two months of the Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada], and then with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.”
Netflix’s earnings per share came in at $1.57, soaring from76 cents a share a year ago. Revenues rose to$5.77 billion from $4.52 billion in a year ago. The Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current year is 45.8% against the Broadcast Radio and Television industry’s estimated decline of 2.1%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let us, thus, focus on the upcoming earnings reports of the remaining FAANG stocks.
iPhone maker Apple Inc. is scheduled to report second-quarter fiscal 2020 earnings on Apr 30, after market close. The coronavirus pandemic forced Apple to shut down its own as well as partners’ stores, which has certainly impacted revenues. Apple’s supply also got disrupted due to slower-than-expected return to work in China after an extended New Year holiday aimed at curtailing the spread of the deadly virus. What’s more, the virus spread in the United States toward the end of March, which has most likely hurt sales.
Thus, analysts expect Apples revenues to decline year over year. But the company’s progress with5G, content, software services, wellness and augmented reality might have boosted earnings. In fact, the Zacks Rank #3 (Hold) company has an Earnings ESP of +0.51%. This is our proprietary methodology for determining stocks that have the best chance to positively surprise with their upcoming earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Before Apple, Facebook, Inc. will be reporting first-quarter results on Apr 29, after market close. The social media giant’s revenues increased 25% year over year in the fourth quarter of 2019. However, management said that it expects year-over-year revenue growth in the first quarter to “decelerate by a low to mid single-digit percentage point as compared to Q4 growth rate.” Now, that’s before the pandemic had hit global markets. Not surprisingly, analysts now expect a much slower revenue growth than management’s predictions.
By the way, advertising revenues account for almost all of Facebook’s revenues. Lest we forget, the company’s ad auction prices tanked 20% in both February and March. To make matters worse, ad agencies noted steep decline in conversion rates, which measure what steps people are taking after clicking on an ad. This might dent the Zacks Rank #3 company’s first quarter profit margins.
Coming to e-commerce giant Amazon.com, Inc., there is no doubt that it is making the most of the shift in consumer preference caused by the pandemic. With many stores closed across the United States and Americans not willing to venture out, Amazon’s sales have skyrocketed.
The current work-from-home scenario has increased the need for cloud storage, something that bodes well for Amazon Web Services. Thus, the Zacks Rank #2 company’s cloud sales are likely to have risen in the quarter to be reported. In fact, Amazon expects overall revenues at $73.3 billion for the quarter ended March 2020, suggesting an increase of22.8% from the year-ago period. Profits of $6.35 per share are anticipated for the first quarter, indicating as light drop from $7.09 reported a year ago.
Last but actually next up, Alphabet Inc. is scheduled to report earnings for the quarter ended March 2020 on Apr 28, after market close. And we certainly expect mixed results! Alphabet’s strengthening cloud unit has been aiding substantial revenue growth. Thus, the company’s revenues for the first three months of this year are expected at $33.3 billion, suggesting an improvement from year-ago sales of $29.48 billion.
However, the Zacks Rank #3 company may face a drop in profits as it had banned advertisements related to sensitive issues like coronavirus during the first quarter. The Google-parent company’s expected earnings per share for the first quarter is $11.16, calling for a decline from $11.90 reported during the same period last year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 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/performancefor information about the performance numbers displayed in this press release.