FinanceDraft

Apple and Facebook poised to beat Earnings Expectations, Bespoke Finance Group

Two of the major FAANG-related (Facebook, Amazon, Apple, Netflix, and Google) stocks, Facebook and Apple, are poised to beat earnings expectations, according to a report by Bespoke Finance Group. The report went on to add that among the three FAANG stocks that are going to report their earnings this week, Amazon is the only one that does not have as good a track record of beating analysts’ earnings expectations as the other two (Apple and Facebook). All the findings in the report have gleaned from historical data of the three companies in question, and it paints a compelling picture of what could be expected this week.

According to the data studied by the Bespoke Finance Group, Facebook has the best history when it comes to beating estimates and stock performance following the all-important announcement. It is quite staggering that Facebook has a 96% hit rate when it comes to beating earnings expectations and in addition to that, the stock has also recorded the best post-earnings performance among all the stocks that have been studied. There may be ongoing troubles at Facebook and Apple, but Bespoke Finance Group’s research only looks at the historical performance of the companies. In that regard, the research cannot be faulted in any way.

Apple had already stated that there might be a shortfall in revenue in the current quarter, but Bespoke has stated that the company is in the habit of tempering expectations when it comes to earnings. Apple had lowered guidance in as many as 9 of its first-quarter earnings, according to the report.

However, the main thrust of the report is that Amazon might not end up beating expectations and that inference has also been drawn from the company’s dodgier record when it comes to beating earnings expectations. The report when on to state that Amazon’s fourth-quarter reports have been historically hit or miss. It added, “The stock has beaten EPS on 5 of its last 8 Q4 reports, but it has only beaten sales estimates once (last Q4). From 2002 to 2010, the stock raised guidance on 5 of its 9 Q4 reports, but since 2011, the stock has lowered guidance 4 times.” As anyone will testify, historical performance of large-cap stocks is almost always the right way to go when it comes to gauging reactions of stock prices to earnings reports. However, there are always factors beyond the history that might have a considerable effect.

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