What's In The Cards For FAANG ETFs This Earnings Season?

The so-called FAANG stocks — Facebook (NASDAQ:FB) , Amazon (NASDAQ:AMZN) , Apple (NASDAQ:AAPL) , Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) – reclaimed their lost sheen this year on hopes of a trade deal between the world’s two largest economies.

Streaming giant, Netflix, the first company in the FAANG group to report Q1 earnings on Apr 16, topped earnings and revenue estimates. While the company’s stronger-than-expected subscriber growth cheered investors, its bleak guidance spread pessimism. Shares of NFLX declined moderately following the results. The other four members are due to report this week and the next (read: Netflix Beats, Guides Lower: ETFs in Focus).

Facebook

Facebook is expected to release its earnings report on Apr 24 after market close. It has a Zacks Rank #3 (Hold) and an Earnings ESP of +1.48%. According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while stocks with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The social media giant saw no earnings estimate revision for the to-be-reported quarter over the past month. The current Zacks Consensus Estimate indicates decline of 2.4% from the year-ago reported figure. However, Facebook delivered positive earnings surprises in the last four quarters, with the average beat being 13.48%. Revenues are expected to increase 25% in the quarter. The stock has a solid Growth Score of B and belongs to a bottom-ranked Zacks industry (bottom 34%). Shares of FB have climbed 18.8% in the past three months (read: IBM (NYSE:IBM) ETFs to Watch Post Q1 Earnings).

Amazon

Amazon, slated to report on Apr 25 after market close, has a Zacks Rank #2 and an Earnings ESP of +10.65%. The stock has seen negative earnings estimate revision of a penny over the past 30 days for the first quarter. The Zacks Consensus Estimate indicates an increase of 40.98% from the year-ago reported figure.

Amazon’s earnings surprise history is also impressive, with a positive earnings surprise of 88.81% on average for the last four quarters. Additionally, the company is expected to report revenue growth of 16.95%. The stock has a top Growth Score of A and falls under the bottom-ranked Zacks industry (bottom 32%). The online e-commerce behemoth has witnessed an increase of 9.8% over the past three months.

Apple

Apple has a Zacks Rank #3 and an Earnings ESP of -1.78%. The stock saw negative earnings estimate revision of 3 cents over the past 30 days for the first quarter but its earnings surprise history is strong. It delivered average positive earnings surprise of 3.47% over the past four quarters. Apple is expected to post substantial earnings decline of 13.2% and revenue decline of 5.79% in the fiscal first quarter. It boasts a solid Momentum Score of B. The stock belongs to a top-ranked Zacks Industry (top 15%) and has gained 30.6% over the past three months. Apple is set to report earnings on Apr 30 (see: all the Technology ETFs here).

Alphabet

Alphabet has a Zacks Rank #3 and an Earnings ESP of -8.14%. It saw negative earnings estimate revision of 20 cents over the past 30 days for the to-be-reported quarter. Additionally, its earnings surprise track over the past four quarters is good with the average beat being 17.83%. It sports a solid Growth Score of A. The Internet behemoth falls under a bottom-ranked Zacks industry (bottom 34%) and has added nearly 12.1% in the past three months. The company will report after the closing bell on Apr 29.

ETFs to Tap

Given the expected strong earnings, investors may want to invest in these stocks with the help of ETFs. Below, we have highlighted five ETFs having the largest exposure to FAANGs.

Invesco QQQ QQQ: This fund makes up for 33.9% share in FAANGs and has a Zacks ETF Rank #1.

iShares North American Tech ETF (TO:IGM) : This product accounts for about 31.6% in FAANG group and has a Zacks ETF Rank #2 (read: 10 Top-Ranked ETFs Leading the 10-Year Bull Run).

iShares Evolved U.S. Technology ETF IETC: This fund accounts for 31.1% share in FAANG stocks.

iShares Russell 1000 Growth ETF IWF: This ETF allocates a combined 21.1% share in FAANG stocks and has a Zacks ETF Rank #1.

First Trust Cloud Computing ETF SKYY: This ETF has 16.3% allocation in FAANGs and has a Zacks ETF Rank #3.

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Netflix, Inc. (NFLX): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

First Trust Cloud Computing ETF (SKYY): ETF Research Reports

iShares Expanded Tech Sector ETF (IGM): ETF Research Reports

iShares Russell 1000 Growth ETF (IWF): ETF Research Reports

Invesco QQQ (QQQ): ETF Research Reports

iShares Evolved U.S. Technology ETF (IETC): ETF Research Reports

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