The Zacks Analyst Blog Highlights: Netflix, Apple, Facebook, Amazon.com and Alphabet

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For Immediate Release” data-reactid=”19″>For Immediate Release

Chicago, IL – April 24, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Netflix, Inc. NFLX, Apple Inc. AAPL, Facebook, Inc. FB, Amazon.com, Inc. AMZN and Alphabet Inc. GOOGL.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Here are highlights from Thursday’s Analyst Blog: ” data-reactid=”21″>Here are highlights from Thursday’s Analyst Blog:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Will FAANG Stocks Steal the Show This Earnings Season, As Well?” data-reactid=”22″>Will FAANG Stocks Steal the Show This Earnings Season, As Well?

As Wall Street’s tech behemoths gear up to post first-quarter earnings results, all eyes are particularly on the FAANG group (Facebook, Apple, Amazon, Netflix and Alphabet-owned Google). FAANG’s stellar market value determines the movement of the stock market, and thus any upsetting outcome will have far-reaching consequences.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But despite an anticipated ugly earnings season, the FAANG group has got off to a flying start.&nbsp;Netflix, Inc.’s blowout results, with doubling of the subscriber base, have been cheered by investors. Widespread lockdowns in the wake of the coronavirus outbreak have compelled people to find ways of entertainment at home. Netflix reported 15.77 million new subscribers globally in the first quarter, way higher than its projected 7 million. The company’s executives confirmed in a letter to shareholders that “during the first two months of the Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada], and then with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.”” data-reactid=”24″>But despite an anticipated ugly earnings season, the FAANG group has got off to a flying start. Netflix, Inc.’s blowout results, with doubling of the subscriber base, have been cheered by investors. Widespread lockdowns in the wake of the coronavirus outbreak have compelled people to find ways of entertainment at home. Netflix reported 15.77 million new subscribers globally in the first quarter, way higher than its projected 7 million. The company’s executives confirmed in a letter to shareholders that “during the first two months of the Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada], and then with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Netflix’s earnings per share came in at $1.57, soaring from76 cents a share a year ago. Revenues rose to$5.77 billion from $4.52 billion in a year ago. The Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current year is 45.8% against the&nbsp;Broadcast Radio and Television&nbsp;industry’s estimated decline of 2.1%.You can see&nbsp;the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.” data-reactid=”25″>Netflix’s earnings per share came in at $1.57, soaring from76 cents a share a year ago. Revenues rose to$5.77 billion from $4.52 billion in a year ago. The Zacks Rank #2 (Buy) company’s expected earnings growth rate for the current year is 45.8% against the Broadcast Radio and Television industry’s estimated decline of 2.1%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Let us, thus, focus on the upcoming earnings reports of the remaining FAANG stocks. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="iPhone maker&nbsp;Apple Inc.&nbsp;is scheduled to report second-quarter fiscal 2020 earnings on Apr 30, after market close. The coronavirus pandemic forced Apple to shut down its own as well as partners’ stores, which has certainly impacted revenues. Apple’s supply also got disrupted due to slower-than-expected return to work in China after an extended New Year holiday aimed at curtailing the spread of the deadly virus. What’s more, the virus spread in the United States toward the end of March, which has most likely hurt sales.” data-reactid=”27″>iPhone maker Apple Inc. is scheduled to report second-quarter fiscal 2020 earnings on Apr 30, after market close. The coronavirus pandemic forced Apple to shut down its own as well as partners’ stores, which has certainly impacted revenues. Apple’s supply also got disrupted due to slower-than-expected return to work in China after an extended New Year holiday aimed at curtailing the spread of the deadly virus. What’s more, the virus spread in the United States toward the end of March, which has most likely hurt sales.

Thus, analysts expect Apples revenues to decline year over year. But the company’s progress with5G, content, software services, wellness and augmented reality might have boosted earnings. In fact, the Zacks Rank #3 (Hold) company has an Earnings ESP of +0.51%. This is our proprietary methodology for determining stocks that have the best chance to positively surprise with their upcoming earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Before Apple,&nbsp;Facebook, Inc.&nbsp;will be reporting first-quarter results on Apr 29, after market close. The social media giant’s revenues increased 25% year over year in the fourth quarter of 2019. However, management said that it expects year-over-year revenue growth in the first quarter to “decelerate by a low to mid single-digit percentage point as compared to Q4 growth rate.” Now, that’s before the pandemic had hit global markets. Not surprisingly, analysts now expect a much slower revenue growth than management’s predictions.&nbsp;” data-reactid=”29″>Before Apple, Facebook, Inc. will be reporting first-quarter results on Apr 29, after market close. The social media giant’s revenues increased 25% year over year in the fourth quarter of 2019. However, management said that it expects year-over-year revenue growth in the first quarter to “decelerate by a low to mid single-digit percentage point as compared to Q4 growth rate.” Now, that’s before the pandemic had hit global markets. Not surprisingly, analysts now expect a much slower revenue growth than management’s predictions. 

By the way, advertising revenues account for almost all of Facebook’s revenues. Lest we forget, the company’s ad auction prices tanked 20% in both February and March. To make matters worse, ad agencies noted steep decline in conversion rates, which measure what steps people are taking after clicking on an ad. This might dent the Zacks Rank #3 company’s first quarter profit margins. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Coming to e-commerce giant&nbsp;Amazon.com, Inc., there is no doubt that it is making the most of the shift in consumer preference caused by the pandemic. With many stores closed across the United States and Americans not willing to venture out, Amazon’s sales have skyrocketed.” data-reactid=”31″>Coming to e-commerce giant Amazon.com, Inc., there is no doubt that it is making the most of the shift in consumer preference caused by the pandemic. With many stores closed across the United States and Americans not willing to venture out, Amazon’s sales have skyrocketed.