Magnificent 7 Earnings Charts Ranked
For the first time in several years, there is no more FAANG or FANGMAN to talk about during the earnings season. It has been retired from the lexicon and has been replaced with the “Magnificent 7.”
While some of the players remain the same, it includes some new names that never fit into the FANGMAN grouping, mainly Tesla. It also gets rid of Netflix, which had been the best performing S&P 500 stock from 2010 to 2020.
Being An Earnings All-Star
It’s not easy to beat every quarter, or nearly every quarter for 5 years, or more. It takes great communication by management to the analysts.
Even among the Magnificent 7 companies, not all are interested in playing the earnings surprise game. Jeff Bezos famously didn’t even attend the earnings conference calls towards the end of his tenure as CEO of Amazon.
But the earnings surprise track record is just another tool that traders, and investors, can look to with a stock. During earnings season, it, obviously, takes on extra importance.
Which of the Magnificent 7 companies have the best, and the worst, earnings surprise track records?
Which Are the Best, and Worst, of the Magnificent 7?
1. Amazon.com, Inc. (AMZN)
Amazon has beat 3 out of the last 4 quarters. It has missed 7 times in the last 5 years but 3 of those were in 2022, which is when Amazon also did a big round of layoffs.
The average surprise over the last four quarters, however, is a whopping 41%, the highest average among the Magnificent 7. Amazon has put together three big beats in a row. For the third quarter, 2 estimates are higher in the last 60 days but none have been raising this week.
Will analysts be behind the curve again on Amazon this quarter?
2. Alphabet Inc. (GOOGL)
Alphabet has beat just 2 quarters in a row. Prior to those beats, it missed 4 quarters in a row in both 2022 and early 2023.
It’s not a surprise, with all those misses in the mix, that Alphabet’s average surprise over the last 4 quarters is in the red by 0.9%.
However, the analysts are bullish on Alphabet heading into the report. 1 estimate is higher, and none are lower, in the last week. The Zacks Consensus has risen to $1.45 from $1.34 in the last 90 days.
Will Alphabet keep its earnings surprise momentum for a third quarter in a row?
3. Tesla, Inc. (TSLA)
Tesla has put together an impressive earnings surprise track record. It has beat 10 quarters in a row. Tesla’s last earnings miss was in early 2021.
Tesla has an average surprise over the last 4 quarters of 7.9%. But despite beating 10 quarters in a row, analysts are bearish heading into this report. 1 estimate has been cut on Tesla in the last week. The Zacks Consensus for the quarter has fallen to $0.73 from $0.86 in the last 3 months.
Will Tesla still make it 11 quarters in a row this week?
4. Apple Inc. (AAPL)
Apple has only missed one time in the last 5 years. That’s extremely impressive given the pandemic and supply chain issues during that time. That miss was in early 2023 however, so it is impacting the average surprise, which is just 2.8%, over the last 4 quarters.
Prior to the miss in 2023, the last miss was all the way back in 2016. Analysts are not bearish going into this report. 1 estimate has been cut, and 2 have been raised, for the quarter over the last 60 days. There haven’t been any changes made to estimates over the last week.
Is Apple sure to beat again?
5. Microsoft Corp. (MSFT)
Microsoft also has a fantastic earnings surprise track record. It also has just one miss in the last 5 years, but it was in mid-2022, so it isn’t still impacting the average surprise data which covers the last 4 quarters. Microsoft’s average surprise was 5.3% during that time.
Prior to the 2022 miss, Microsoft’s last miss was, like Apple’s, also in 2016. But the analysts aren’t betting against Microsoft this quarter. There haven’t been any changes to the quarterly estimates over the last 60 days, neither up or down.
Will another earnings beat send Microsoft’s shares to new all-time highs?
Tune into the video to find out where each company ranks. Who is the king of earnings season in the Magnificent 7?
[In full disclosure, Tracey owns shares of AMZN, GOOGL and MSFT in her personal portfolio.]
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