Second quarter earnings season is here.
This quarter is expected to be the most important earnings season of the decade. The entire quarter was impacted by the COVID-19 pandemic, unlike the first quarter which saw only a minor impact at the end of the quarter.
How bad was it?
Expectations are extremely low. No doubt some companies will beat the lowered expectations. But look for a lot of surprises in the reports.
The first FAANG stock, Netflix, leads the group with its earnings report this week.
The FAANG stocks have been breaking out again heading into this earnings season. They have cash and some have businesses that have been benefiting from the COVID pandemic.
They are still considered to be “sure things.”
Which FAANG Stock Has the Best Earnings Chart?
1. Facebook (FB - Free Report) is coming off a miss last quarter but it has beat 2 out of the last 4 quarters. Facebook faces other issues, however, including the boycott from some large advertising customers on its flagship Facebook site. Shares are trading at 31x but is this one a buying opportunity with all the negative headlines?
2. Apple (AAPL - Free Report) has only missed once in the last 5 years and it was 4 years ago. That’s an impressive streak of beats for any company. Shares are up 31% year-to-date and at new highs. Is this the best chart of the five?
3. Amazon (AMZN - Free Report) has been one of the big winners of the COVID economy as it was delivering essential products, such as food, during the height of the crisis. It has missed 3 out of the last 4 quarters but investors haven’t cared. Can it keep rallying?
4. Netflix (NFLX - Free Report) is coming off a rare miss last quarter as it had only missed twice over the last 5 years prior to that. Shares have soared as the movie theaters remain closed and everyone is home streaming. When will shares finally cool?
5. Alphabet (GOOGL - Free Report) is also coming off a miss last quarter. It has beat just 2 out of the last 4 quarters. Shares have rebounded to new all-time highs even with digital advertising taking a hit. It’s trading at 36x. Is the rally priced in?
[The author of this article owns shares of GOOGL, FB and AMZN in her personal portfolio.]
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