Diving into the FAANG Stock Earnings Charts

Earnings season picks up this week with over 300 companies expected to report earnings.

Included in that group are many of the big regional banks, the first of the FAANG stocks with Netflix, big growth favorite Tesla, and a bunch of other companies that could tell us a lot about the consumer and a possible recession.

But the FAANG stocks are really in the spotlight this earnings season. It’s the first time where all 5 of the stocks are going into their earnings reports down more than double digits for the year.

The bloom is off the rose.

But with expectations so low, can this earnings report be a catalyst for the shares?

What to Watch with the FAANG Stock Earnings Charts

1.    Netflix NFLX

Netflix has beaten 4 quarters in a row. But Netflix has never been about a beat or an earnings miss. It’s about subscribers and those have been falling the last few quarters.

It’s not a surprise, then, that Netflix shares are down 62% year-to-date.

Earnings are expected to fall 11% this year even as the company is about to roll out an ad supported subscription option.

Netflix is now trading with a forward P/E of 23. Is Netflix a deal?

2.    Meta Platforms META

Meta Platforms has missed 2 out of the last 4 quarters and has issued earnings warnings already earlier this year.

Meta Platforms is among the worst performers of the FAANG stocks, with shares down 62% year-to-date. It shouldn’t be a surprise as earnings are expected to fall 30% this year.

Meta Platforms is now cheap, with a forward P/E of just 13.3.

Is Meta Platforms a value stock or a trap? 

3.    Apple AAPL

Apple is still perfect. It hasn’t missed on earnings in 5 years which is impressive given the coronavirus pandemic in 2020. Many companies lost their perfect record during that time.

Apple was the place to hide out in for most of this year but shares have now weakened again and are down 22% year-to-date. 

But Apple still isn’t cheap, with a forward P/E of 21.3. 

Does Apple need to fall further before the market ultimately finds a bottom?

4.    Amazon AMZN

Amazon has missed big in the last 2 quarters. It also has frozen new corporate hiring, which is another sign that the company is struggling in this higher inflationary environment.

Shares are down 35% year-to-date but they’re not cheap on a P/E basis. Amazon has a forward P/E of 570 because earnings are expected to fall off a cliff. The Zacks Consensus Estimate is calling for just $0.19 for 2022 compared with $3.24 the company made last year.

Does Amazon have more room to fall?

5.    Alphabet GOOGL

Alphabet has missed two quarters in a row after beating 7 quarters prior to that. In the past, however, Alphabet hasn’t really had a great earnings surprise track record so the misses are not surprising.

Alphabet earnings are expected to fall 7% in 2022 and shares have lost 33% year-to-date.

Is it cheap? Alphabet now trades with a forward P/E of 18.5.

But Alphabet is the leader in online advertising and that usually gets hit first in a recession.

Should Alphabet be on your short list?

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

Just Released: Zacks Unveils the Top 5 EV Stocks for 2022

For several months now, electric vehicles have been disrupting the $82 billion automotive industry. And that disruption is only getting bigger thanks to sky-high gas prices. Even titans in the financial industry including George Soros, Jeff Bezos, and Ray Dalio have invested in this unstoppable wave. You don't want to be sitting on your hands while EV stocks break out and climb to new highs. In a new free report, Zacks is revealing the top 5 EV stocks for investors. Next year, don't look back on today wishing you had taken advantage of this opportunity.