Are the FAANG Stocks About to Break Out Again?

Tracey Ryniec
·3 min read

There are about 100 companies expected to report earnings this week, including the first of the FAANG stocks: Netflix.

The FAANG stocks got hit in the initial coronavirus pandemic sell-off in February and March 2020 but rebounded quickly as they were uniquely situated to gain market share during the pandemic.

Who didn’t try and order work out equipment on Amazon at some point last spring?

The FAANG stocks broke out to new all-time highs in 2020.

But what happens now?

None of them are cheap but earnings are on the rise.

Is there further upside coming?

Or will the shares cool off in 2021?

Which FAANG Stock Has the Best Earnings Chart?

1.    Netflix NFLX has missed 3 quarters in a row but the shares are still up 47.5% in the last year. Shares have rallied 378.6% in the prior five years. But shares are trading at 55x and they have been treading water in the last few months. Will this report send the shares to new highs?

2.    Apple AAPL has the best earnings surprise record of all of the FAANG stocks. It has only missed one time in the last 5 years, all the way back in 2016. Shares are up 59.6% in the last year and have gained 420% in the last 5 years. Is there still gas left in the tank in 2021?

3.    Facebook FB has beat big two quarters in a row but it is, once again, at the heart of concerns about speech regarding the events at the Capitol on Jan 6.  The company is also facing government actions, as the FTC sued Facebook in 2020 for illegal monopolization. The shares are still up over the last year but just 10.6%. They’ve started 2021 down 8%. But the stock is now trading at just 23x, making it the cheapest of the FAANG stocks. Is this weakness a buying opportunity?

4.    Amazon AMZN has beat big 2 quarters in a row as it has been the go-to source of food, goods and even video streaming on Amazon Prime during the pandemic. It’s expected to report a big holiday quarter. Over the last year, the shares are up 66.5% and now trade with a forward P/E of 69. Is Amazon set to be a winner of the pandemic recovery sure to come in 2021?

5.    Alphabet GOOGL is also coming off of 2 big beats after its advertising business quickly rebounded off the March pandemic lows. Shares are up 16.7% over the last year. It’s the second cheapest FAANG with a forward P/E of 27.6. Is Alphabet the hidden gem of the group?

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

5 Stocks Set to Double

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