Many Americans and investors continue to be focused on a group of four technology firms that have become some of the biggest companies in the world, known simply by the acronym “FANG.”
The phrase, created and popularized by CNBC‘s Jim Cramer, refers to Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Alphabet Inc (NASDAQ:GOOGL) — formally Google. These companies have all been extremely successful in recent years, experiencing continued sales growth and massive surges in their stock prices—which has spurred many investors to jump on board.
Shares of FANG companies are all up over 20% since the start of the year, with Facebook’s 46.66% year-to-date price change leading the charge.
Interestingly enough, Bank of America Corp (NYSE:BAC) recently added two more names to the mix to create “FAAANG.” Savita Subramanian added Broadcom Ltd (NASDAQ:AVGO) and Adobe Systems Incorporated (NASDAQ:ADBE) to the group of mega technology players.
This might make some investors start to wonder if the core four FANG stocks are poised to keep growing this year, as several new companies are starting to be added to the conversation related to high-performance tech stocks.
So are FANG stocks set to pop as we head full force into Q4? Let’s look to see how the next few quarters and the full-year are shaping up for Facebook, Amazon, Netflix, and Google/Alphabet.
FANG Stocks Set to Pop in the Fourth Quarter: Facebook Inc (FB)
Facebook is currently a Zacks Rank #2 (Buy), and the stock sports “A” grades for both Growth and Momentum in our Style Scores system.
Based on our consensus estimates, Facebook’s current-quarter sales are projected to skyrocket 40.45%. For the full-year, the company’s revenues are set to pop 41.93% to hit as high as $40 billion. The social media giant’s earnings are set to pop 19.33% this quarter and 26.47% for the full year.
Within the last 60 days, Facebook has received 11 upward earnings estimate revisions and zero negative revisions. During this same time frame, the firm has received 11 positive estimate revisions for the next quarter and 12 for the year, all without being downgraded.
FANG Stocks Set to Pop in the Fourth Quarter: Amazon.com, Inc. (AMZN)
Despite Amazon’s extended run of success, the company is currently a Zacks Rank #5 (Strong Sell). The firm’s “F” grade for Value in our Style Scores system helps to bring down its overall VGM grade, even with its “A” scores for both Growth and Momentum.
The company’s 27.54% year-to-date price change is impressive and beats the S&P 500 average of 10.56%. But things could change for Amazon in the next few quarters. Over the last 60 days, the company has been dragged down by a wave of negative earnings estimate revisions, which greatly affect the Zacks Rank.
The company has earned 10 downward revisions for its current quarter, and nine for its next quarter, while earning zero upward revisions. In this same 60-day time frame, Amazon has earned 11 downward revisions for both its current full-year and following year earnings estimates—again with no upward changes.
Amazon’s sales are projected to continue to surge, with our consensus estimates calling for 28.45% growth this quarter and 28.71% growth for the year to hit an eye-popping $176.58 billion.
But Amazon has spent billions and billions of dollars during its wave of expansion into almost every industry possible over the last few years. This has hurt the company’s bottom line and diminished potentially-larger earnings. Amazon’s earnings are expected to plummet 103.57% in its current quarter and 29.13% for the year.
FANG Stocks Set to Pop in the Fourth Quarter: Netflix, Inc. (NFLX)
This streaming video company has obviously helped to shake up the movie and television industry as we know it. Netflix’s 45.96% year-to-date price change came in just below FANG category leader Facebook. This growth is set to continue, despite the company’s current Zacks Rank #3 (Hold) status.
Netflix’s revenues are expected to balloon to as high as $11.55 billion for its full-year, which would mark 30.47% year-over-year growth. Within the last 60 days, the streaming service has received 13 upward earnings estimate revisions and no downward changes. Within that same time frame, Netflix has earned 13 upward revisions and to just one negative for the full-year.
Based on our consensus estimate, Netflix’s earnings are projected to pop 165.56% for its current quarter and soar 177.05% for the year.
FANG Stocks Set to Pop in the Fourth Quarter: Alphabet Inc (GOOGL)
Alphabet’s market cap is the largest of the four FANG companies and its stock price has experienced a 21.75% year-to-date price change, which tops the S&P average but falls short of some of its peers’ more lofty gains. Google’s parent company is currently a Zacks Rank #3 (Hold) and has received a mixed-bag of earnings estimate revisions for its current quarter and the following quarter.
For the full-year, Alphabet’s 13 negative earnings estimate revisions, with no upward changes, is the worst among FANG.
Alphabet’s revenues are projected to gain around 20% for the quarter and the year to hit an upward estimate of $89.04 billion. However, the internet giant’s earnings are set to fall 7.39% for the quarter and 9.91% for the year.
Bottom Line on FANG Stocks
All four FANG tech companies are set to see their revenues jump at very impressive rates during the quarter and the year—with Facebook expected to post the biggest gains. Netflix’s earnings are projected to skyrocket almost 180% for the year. But Alphabet and Amazon are set to see major quarterly and full-year earnings declines.
It seems, that for now, growth investors might want to consider Facebook and Netflix over the other two FANG firms. But Alphabet and Amazon are still likely strong long-term plays.
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