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First quarter earnings season is off and running. This week, there will be several hundred companies reporting, including dozens of regional banks, railroads, semiconductor giants, homebuilders, Tesla and Netflix.
Netflix is the first of the FAANG stocks to report earnings. Yes, we’re still watching the FAANGs even as they change their corporate names from Facebook to Meta Platforms and Google to Alphabet.
But it’s still F-A-A-N-G. These are some of the largest companies in the world employing millions of people. What they say about their businesses matters.
For that reason, we are all going to keep watching their earnings reports.
Which ones have the best earnings surprise track records? Which records do investors even actually care about? For years, the beat and/or miss on earnings wasn’t a big factor in the earnings report. Has that changed in 2023?
Meta Platforms had a tough 2022 with big layoffs and the sharp decline in its stock. But in 2023, the Street has been bullish, bidding up the stock 84% year-to-date. Meta has beat on earnings 2 out of the last 4 quarters
Analysts have been raising estimates again on Meta Platforms. It has the top Zacks Rank again, the Zacks #1 Rank (Strong Buy). Only about 230 companies have the top Zacks Rank on any given day.
Shares of Meta Platforms aren’t as cheap as they used to be, with a forward P/E of 21.
Is the worst over for investors in Meta Platforms?
Apple used to have the best earnings surprise track record, with 5 years of beats. But last quarter, Apple finally missed on the Zacks Consensus. It missed by $0.05, reporting $1.88 versus the Zacks Consensus of $1.93.
Shares of Apple are up 27.2% year-to-date as the Street has brushed off the miss. But shares remain expensive, with a forward P/E of 27.4.
Netflix has beat 3 out of the last 4 quarters, but the miss was last quarter and it was huge. Netflix reported earnings of just $0.12 versus the Zacks Consensus of $0.47. That’s a miss of $0.35, or 74.5%.
Shares of Netflix are up 14.8% year-to-date but over the last 2 years it has fallen 39%.
Is it a deal? Netflix has a forward P/E of 29.9, which isn’t a value but who cares? Netflix has been a growth stock for the last 20 years.
Will Netflix set the tone for the other FAANG stocks this earnings season?
Alphabet has missed four quarters in a row after putting together a nice earnings surprise streak during the pandemic. Remember, Alphabet’s YouTube was a pandemic winner with everyone stuck at home.
But the shares sold off in 2022. Alphabet, however, has rebounded like the other FAANG stocks in 2023. Shares are up 20% year-to-date.
Alphabet trades with a forward P/E of 21.2, which is the cheapest of the FAANG stocks.
Should Alphabet be on your short list?
[In full disclosure, Tracey owns shares of AMZN and GOOGL in her own personal portfolio.]
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The Best FAANG Earnings Charts
First quarter earnings season is off and running. This week, there will be several hundred companies reporting, including dozens of regional banks, railroads, semiconductor giants, homebuilders, Tesla and Netflix.
Netflix is the first of the FAANG stocks to report earnings. Yes, we’re still watching the FAANGs even as they change their corporate names from Facebook to Meta Platforms and Google to Alphabet.
But it’s still F-A-A-N-G. These are some of the largest companies in the world employing millions of people. What they say about their businesses matters.
For that reason, we are all going to keep watching their earnings reports.
Which ones have the best earnings surprise track records? Which records do investors even actually care about? For years, the beat and/or miss on earnings wasn’t a big factor in the earnings report. Has that changed in 2023?
What to Watch for in the FAANG Earnings
1. Meta Platforms (META - Free Report)
Meta Platforms had a tough 2022 with big layoffs and the sharp decline in its stock. But in 2023, the Street has been bullish, bidding up the stock 84% year-to-date. Meta has beat on earnings 2 out of the last 4 quarters
Analysts have been raising estimates again on Meta Platforms. It has the top Zacks Rank again, the Zacks #1 Rank (Strong Buy). Only about 230 companies have the top Zacks Rank on any given day.
Shares of Meta Platforms aren’t as cheap as they used to be, with a forward P/E of 21.
Is the worst over for investors in Meta Platforms?
2. Amazon (AMZN - Free Report)
Amazon has missed on earnings 3 out of the last 4 quarters. But do investors care?
After falling sharply in 2022, Amazon shares are up 22% year-to-date. It’s not cheap, but it never has been. Amazon sports a forward P/E of 75.8.
Have Amazon shares seen the bottom?
3. Apple (AAPL - Free Report)
Apple used to have the best earnings surprise track record, with 5 years of beats. But last quarter, Apple finally missed on the Zacks Consensus. It missed by $0.05, reporting $1.88 versus the Zacks Consensus of $1.93.
Shares of Apple are up 27.2% year-to-date as the Street has brushed off the miss. But shares remain expensive, with a forward P/E of 27.4.
Should you be buying Apple in 2023?
4. Netflix (NFLX - Free Report)
Netflix has beat 3 out of the last 4 quarters, but the miss was last quarter and it was huge. Netflix reported earnings of just $0.12 versus the Zacks Consensus of $0.47. That’s a miss of $0.35, or 74.5%.
Shares of Netflix are up 14.8% year-to-date but over the last 2 years it has fallen 39%.
Is it a deal? Netflix has a forward P/E of 29.9, which isn’t a value but who cares? Netflix has been a growth stock for the last 20 years.
Will Netflix set the tone for the other FAANG stocks this earnings season?
5. Alphabet (GOOGL - Free Report)
Alphabet has missed four quarters in a row after putting together a nice earnings surprise streak during the pandemic. Remember, Alphabet’s YouTube was a pandemic winner with everyone stuck at home.
But the shares sold off in 2022. Alphabet, however, has rebounded like the other FAANG stocks in 2023. Shares are up 20% year-to-date.
Alphabet trades with a forward P/E of 21.2, which is the cheapest of the FAANG stocks.
Should Alphabet be on your short list?
[In full disclosure, Tracey owns shares of AMZN and GOOGL in her own personal portfolio.]