A Deep Dive into the FAANG Earnings Charts

·4-min read

This is a shortened trading week due to the Martin Luther King Day holiday but that doesn’t mean it’s not filled with plenty to keep traders busy.

Fourth quarter earnings season heats up with about 100 companies expected to report. Among them will be many of the regional banks, but there will also be other large cap companies reporting that investors should be watching.

One of those is the first of the FAANG stocks, Meta, Apple, Amazon, Netflix and Alphabet, to report earnings.

Netflix will lead off the group this week but what does its earnings surprise track record look like?

Do investors and traders even care if the FAANGs have good earnings surprise track records and good earnings growth?

Or are these “sure things” simply “sure things”?

A Deep Dive into the FAANG Earnings Charts

1.    Meta Platforms, Inc. FB

Meta Platforms, formerly known as Facebook, has beat 6 quarters in a row.

The shares of this social media giant are down 5.4% in 2022.

Meta Platform’s earnings are expected to be mostly flat in 2022 as the company spends on developing the metaverse.

Yet shares are still attractively valued, with a forward P/E of just 23.8.

That P/E makes the Meta Platforms the cheapest of the FAANG stocks, on a P/E basis.

Is Meta Platforms a value?

2.    Apple AAPL

Apple has the best earnings surprise track record of the FAANG stocks. It hasn’t missed on earnings in 5 years.

That’s impressive, in general, even if you don’t include a pandemic in that period.

It’s not easy to beat every quarter for 5 years.

Apple shares hit new all-time highs to start the new year but are now down 4.4% year-to-date.

Apple remains expensive, however, with a forward P/E of 29.8. Fiscal 2022 earnings are only expected to grow 3.7%.

Is Apple over valued?

3.    Amazon AMZN

Amazon missed last quarter, but it was the company’s first miss in 6 quarters.

Shares have been in a narrow trading range for over a year, with the shares up just 4.5% during that time.

In 2022, Amazon shares have dropped 4.7%.

But earnings are expected to jump 22% in 2022 with revenue rising 17.6%.

As the shares remain stalled, but the “E” is rising, that means the P/E has fallen and now sits at 65. For any other company, that’s a sky-high P/E ratio, but for Amazon, it’s on the lower end.

Is Amazon a value in 2022 as the economy continues to recover?

4.    Netflix NFLX

Netflix has beat 2 out of the last 4 quarters, including a 24% beat last quarter.

But the shares have fallen 15.2% year-to-date during the growth stock sell-off.

Netflix’s earnings are expected to jump 23.6% in 2022 after earnings are forecast to grow 76% in 2021.

That’s the strongest growth among the FAANG stocks. But you’ll pay the price to own it, as Netflix has a forward P/E of 39.7.

Should investors have Netflix on its short list if it continues to sell off?

5.    Alphabet GOOGL

Alphabet has beat 6 quarters in a row.

It was the best performing FAANG stock over the last year, with shares up 57.4%.

However, Alphabet has started 2022 with weakness, like the other FAANG stocks, falling 6.1% year-to-date.

Earnings are expected to rise 85% in 2021 but cool off in 2022, with another 4.8% growth expected.

Alphabet is trading with a forward P/E of just 24.5, making it one of the cheaper FAANG stocks.

Will Alphabet lead the group again as the best performer in 2022?

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

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