Big Earnings Reports This Week from AMZN, GOOGL, FB & TSLA

 

This week the market will get some big reports out of the tech sector. Huge names like Amazon, Alphabet, Facebook and Tesla.

While the market remains overall optimistic, there are enough uncertainties out there that each and every earnings report could send ripple effects across not only individual sectors but the overall market as well.

At this time, Wall Street has pushed stocks higher in anticipation of a future interest rate cut, but there is no guarantee that a rate cut is coming. Ongoing trade tensions between the U.S. and China will also continue to impact the market, and while there is currently a “cease fire” in the tariff war, conditions could rapidly deteriorate and send the markets reeling once again.

In recent years technology has been one of the hottest sectors in the market, and this week we will see earnings reports from some of the biggest names in tech. A good or bad earnings season for big tech can definitely have an impact on the broader market, so tech earnings are always very important to watch.

Let’s take a closer look at a few of the big tech names to report this week.

Amazon (AMZN)

Tech giant Amazon.com (AMZN) will report its second-quarter numbers after the market close Thursday. Analysts forecast the e-commerce leader to earn $5.29 per share with $62.51 billion in revenue, up from $5.07 on $52.9 billion during the same period last year. AMZN has been a top stock in 2019 with shares currently up 31% on the year and trading just shy of its all-time high set last summer. Amazon has a strong earnings track record, with positive earnings surprises each of the last seven quarters. Revenues have outpaced estimates each of the last two quarters. Amazon remains the top e-commerce site, and trails just Microsoft (MSFT) in the fast growing cloud computing sector. Despite its maturity Amazon remains a strong growth story with profits up 103% annually over the last five years and analysts forecast profits to rise at 61% per annum over the next five years. AMZN has a high valuation with a forward P/E of 51, but the stock has always traded at very high multiples, and the valuation will not prevent shares from trading higher on another strong quarterly report. The street expects another big earnings beat with a whisper number of $5.70 for the quarter. AMZN is currently trading at $1,967.35 with an average price target of $2,204.44.

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Alphabet (GOOGL)

Search leader Alphabet (GOOGL) reports second-quarter numbers after the market close on Thursday with the consensus calling for earnings of $11.49 per share and sales of $30.9 billion. The company earned $11.75 on sales of $32.66 billion last year. Last quarter the company missed estimates on both the top and bottom line which drove shares sharply lower. Traders have come back into the stock since the start of June as strength returned to the overall market, but the company will need to post better results this quarter for shares to continue to build on recent momentum. Google has shown consistent growth over the years, with profits up 14.6% annually the last five years. Looking ahead analysts expect more of the same with forecast earnings growth of 12.6% per annum for the next five years. GOOGL is still trading well below where it was prior to last quarter’s disappointing results, so there is a lot of upside if this quarter’s report comes in better than expected. Analysts remain upbeat and having a bullish price target set on the stock. GOOGL trades at $1,129.72 with an average price target of $1,322.97.

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Facebook (FB)

Facebook (FB) is expected to release its Q2 report after the market close Wednesday. The consensus calls for earnings of $1.90 for the quarter and sales of $16.45 billion, up from $1.74 on $13.23 billion during the same period last year. Facebook remains the biggest social media network, and boasts a massive 2.4 billion active monthly users. When you consider the world’s population sits around 7.5 billion, Facebook’s active users become even more impressive. The large scale audience allows Facebook to be the only company able to challenge search giant Google (GOOGL) for online advertising, and Facebook also runs popular social media networks Instagram and WhatsApp. For the most part Facebook has managed to overcome its data privacy concerns that stemmed from the 2016 election, and shares are up 54% year to date and are approaching last summer’s all-time high. The stock has a reasonable valuation with a forward P/E of 21.6 and earnings are forecast to rise at an annual rate of 20% over the next five years. There is a lot of optimism in the stock and shares could trade up to a new record high if the company is able to post better than expected numbers. The street is expecting a positive earnings surprise with a whisper number of $2.01 for the quarter. FB trades at $200.38 with an average price target of $212.59.

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Tesla (TSLA)

Electric car maker Tesla (TSLA) will release its second-quarter numbers after the market close Wednesday. Ahead of the quarterly report analysts forecast a loss of 52 cents per share for the quarter with revenue of $6.38 billion. During the same period last year TSLA lost $3.06 per share and reported revenue of $4 billion. While Tesla is technically an automaker, it gets lumped into technology as well since there is so much tech involved in the company’s operations. TSLA has always traded wildly around its earnings reports, and this is quarter is likely to see the same. After a tough first half of the year the stock came to life in June with the overall market, and shares are currently trending higher after Tesla announced record deliveries last quarter. The company reported delivering around 95,200 vehicles in Q2, which topped its previous record quarter of 90,700. There is no questioning demand for the company’s cars, but Tesla has to consistently prove it can grow its deliveries without compromising quality for Wall Street to remain bullish on the stock. This week’s quarterly report could be a big driver of the stock moving forward, particularly since the stock lost so much value in the first 6 months of the year and the company recently reported its record quarter of deliveries. There is a lot of optimism in the stock, which will either push shares sharply higher, or lead to another big sell off on any disappointing news. The street’s whisper number calls for a smaller than expected loss of 44 cents per share. Analysts have an average price target of $268.77 on the stock, which is currently trading at $257.34.

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Symbols: AMZN FB GOOGL TSLA
Michael Fowlkes

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.

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