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Are the FAANG Stocks too Hot to Handle This Earnings Season?

Tracey Ryniec

Fourth quarter earnings season picks up steam this week with dozens of financial companies, some big cap blue chips, and the first of the FAANG stocks, all reporting earnings.

Netflix leads off FAANG, Facebook, Apple, Amazon, Netflix and Alphabet, this week with the first earnings report from the glamour stocks.

While several of the FAANG stocks are hitting new highs going into this earnings report, Netflix is one of those that is not.

What will this earnings season tell us about the hot big cap stocks?

Are the FAANG Stocks too hot to Handle?

1.    Facebook FB has finally busted out of its 2019 malaise and is trading at new all-time highs in 2020. Shares are still among the cheaper of the FAANG names, with a forward P/E of just 24. Revenue is expected to jump 21% in 2020. Is Facebook a buying opportunity?

2.    Apple AAPL has been hitting new all-time highs never every session in 2020. Is it just too hot to handle here? Apple used to be the “cheap” name in the group, with a P/E around 10x. But now it trades with a forward P/E of 24 and revenue is expected to grow only 5.8% this fiscal year. It has a great track record of meeting and/or beating, however, with just one earnings miss in the last 5 years.

3.    Amazon AMZN has missed twice in a row but Bezos has never cared about hitting the earnings number. Shares have been trading in a narrow trading range the last 2 years. Analysts still expect revenue to jump 18.5% in 2020. Is Amazon the one to watch this earnings season?

4.    Netflix NFLX has a great track record of beating, having only missed twice in the last 5 years and that was in 2017. But it’s all about subscribers, and not the beat, with this company. Like Amazon, it also is trading in a narrow trading range and hasn’t hit new highs since 2018. Will this be the report which sends the shares into a break out?

5.    Alphabet GOOGL is coming off a miss last quarter but Alphabet has never been about beating the estimate. Shares have broken out to new all-time highs in 2020 and are still attractively priced with a forward P/E of just 27. Analysts expect revenue to jump another 18% in 2020 which is incredible given the size of the company. How do they do it?

[In full disclosure, the author of this article owns shares of FB, AMZN and GOOGL in her personal portfolio.]

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
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Apple Inc. (AAPL) : Free Stock Analysis Report
 
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