• (1:00) - Are The FAANG Stocks Becoming Value Stocks?
• (6:30) - Breaking Down The Performance of The FAANG Stocks: Should You Be Buying?
• (26:20) - Big Takeaways From The FAANG: FB, AAPL, AMZN, NFLX, GOOGL
•                Podcast@Zacks.com

Welcome to Episode #272 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

This podcast has often talked about the FAANG stocks, Meta Platforms, Apple, Amazon, Netflix and Alphabet, looking at whether they were cheap enough to buy or not.

But in 2022, all of the FAANG stocks have sold off, so this has produced an opportunity.

Are they values or traps?

Value Stocks Versus Traps

Remember, value stocks are usually stocks with low P/E or P/S ratios. They are usually being ignored by the Street in some way.

Value traps can also have low P/Es and be ignored. But they also usually have something else: declining earnings estimates.

Are the FAANG stocks expected to grow their earnings in 2022 or not?

FAANG Stocks: Values or Traps?

1.       Meta Platforms

Meta Platforms is the worst performing FAANG stock of 2022, falling 42%. Over the last 2 years, Meta Platforms is up just 8.1%. That is underperforming the S&P 500, which is up 44% during the same period.

But after the sell-off, Meta Platform is cheap. It trades with a forward P/E of just 14.9.

Meta Platforms’ sales are still expected to grow double digits in 2022 and 2023.

But what about earnings?

Is Meta Platforms a value or a trap?

2.       Apple (AAPL Quick QuoteAAPL - Free Report)

Even mighty Apple, which is up 125% over the last 2 years, has been weak in 2022.

Shares are down 8.4% year-to-date, and have been down as much as 10%, before bouncing.

It’s cheaper than it was in 2021, with a forward P/E that has fallen from 32 to 25.6. But Apple still isn’t a cheap stock.

Apple’s sales are expected to rise 8.5% in fiscal 2022 and another 6.8% in fiscal 2023.

Will Apple also grow its earnings this year as well?

3.       Amazon (AMZN Quick QuoteAMZN - Free Report)

Amazon has never been “cheap” on a P/E basis. But with shares down 17% year-to-date, and in the red over the last year, it now trades at just 53x.

For Amazon, that’s a “low” P/E.

Sales are expected to soar another 15% in 2022 and 17% in 2023.

But inflationary pressures, including rising energy prices, could have big impact in 2022.

Is Amazon a value in 2022?

4.       Netflix (NFLX Quick QuoteNFLX - Free Report)

Netflix was a pandemic winner as everyone was stuck at home.

But shares have sunk 40% year-to-date and even though it is one of the best performing stocks of the last 20 years, the shares are down 2% over the last 2 years.

Netflix is expected to grow sales by 12% in 2022 and another 13% in 2023.

This Zacks #4 (Sell) trades at a forward P/E of 31, which is “low” for Netflix historically.

Is Netflix a value or a trap?

5.       Alphabet (GOOGL Quick QuoteGOOGL - Free Report)

Alphabet has been a big winner over the last two years, trailing only Apple in performance among the FAANG stocks. Shares are up 106% during that time.

But even Alphabet shares have sunk in 2022, falling as much as 12% before rebounding.

Alphabet’s PEG ratio has sunk to just 1.09. A PEG ratio under 1.0 usually indicates a company has both value and growth.

With 2022 sales expected to rise 17.6%, are earnings also expected to rise this year?

What else do you need to know about the FAANG stocks in 2022?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of FB, AMZN and GOOGL in her personal portfolio.]