FANG, an acronym created by TheStreet's Jim Cramer several years ago, is representative of four of the most popular and best-performing tech stocks in recent memory -- Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOG) (GOOGL) (the artist formerly known as Google).
After collectively trouncing the S&P 500 in 2015, gaining an average of 83% compared to a relatively flat year for the broader S&P, is there more room to run?
Wall Street certainly thinks so.
Looking at data compiled by Thomson Reuters, out of 50 analysts who cover Facebook, 18 rate the company a strong buy with 28 rating them buy. The median price target on Facebook is $135, with a high of $170, indicating the sell-side thinks there's considerable room to run.
After the company's fourth quarter results, Cramer wrote that Facebook is the best story of the year based on its accelerating revenue growth, mobile strength, video as a catalyst, spending with a purpose, the potential of Messenger and the Oculus Rift virtual reality product coming to market.
Forty-five analysts cover Amazon (up from 43 in 2015), with 14 rating the company a strong buy, 26 buys and 5 holds, compared to 12 strong buys, 22 buys and 8 holds in 2015. The median price target on Amazon is $735, with a high of $900, indicating there's at least 20% higher to go, if not more.
After Amazon's fourth-quarter results, Cramer wrote Amazon was "an emotional stock," but if you could take the short-term pain being inflicted by the market, you could make some money by being patient.
Fifty analysts cover Alphabet, compared to 49 in 2015. Seventeen rate it a strong buy, 30 have buy ratings and just three have hold ratings, compared to last year, when it had 16 strong buys, 23 buys and 10 holds. The median price target on Alphabet is $916, with a high of $1,080, which would be a climb of nearly 40% from current levels.
Following the company's fourth quarter results, Cramer said that like Facebook, Alphabet is seeing accelerated revenue growth while also lowering expenses, thanks to new CFO Ruth Porat. "I don't want this point lost on you," Cramer wrote. "The really great growth stocks always look ridiculously expensive before we see the earnings in the out years."
Forty-five analysts cover Netflix, up from 42 in 2015 -- this year, 7 analysts have a strong buy on shares, 17 rate it a buy while 17 analysts have a hold rating on the stock. In 2015, eight analysts had strong buys, 16 analysts had buys and 14 analysts had hold ratings on the stock.
The median price target on Netflix is $130, with a high of $164, which would be a climb of nearly 70% from where shares are trading now.
Prior to January earnings, Cramer said that while the Netflix chart was broken, the company's market cap was "too small for its worldwide opportunity." Netflix's current market cap is around $42 billion, slightly lower than when Cramer wrote the post in January.
The returns over the past year has been nothing short of impressive -- Facebook shares have gained 41%, Google's stock is up 36%, Amazon has jumped 55% and Netflix has surpassed them all, rising 57%.Facebook and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
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All four FANG stocks recently reported fourth quarter results, but not all were well received by investors.
Following earnings, Facebook and Alphabet saw significant rises in their shares, up 16% and 1% respectively, at a time when markets were in severe turmoil.
But Amazon and Netflix did not fare as well. Netflix shares slipped the day after it reported, but shares fell 14% over the next month and Amazon shares fell more than 10% and have not recovered the highs since the day prior to earnings.
Netflix is in the midst of global expansion, adding subscribers at a breakneck speed, having announced an unprecedented near-global expansion in January in hopes of becoming the preeminent subscription-service content company on the planet, challenging the dominance of Time Warner's (TWX) HBO.
The company is expanding not just original television content, such as House of Cards, Daredevil, Jessica Jones and Orange is The New Black to name a few, but also expanding into movies as well. The company recently released a sequel to Crouching Tiger, Hidden Dragon and is in talks to acquire a big-budget movie with Will Smith.
Alphabet has turned around earlier perception that its core business was slowing, showcasing it is thriving, mobile is a help, not a hindrance and the company's "moonshot" programs are not nearly as taxing as people thought. Google CEO Sundar Pichai has constantly talked up how extraordinary YouTube is, noting that mobile revenue was especially aided by YouTube, which has more than 1 billion users.
CFO Ruth Porat, formerly Morgan Stanley's (MS) CFO, has been well received by investors since she came on. Since May 26, 2015, her first day at work, Alphabet shares are up 35%, compared to a 6.7% decline in the Nasdaq.
Amazon has demonstrated that its business model, which is to forsake short-term profits and continuously expand into new areas, is paying off.
Despite the hiccup in fourth quarter earnings, Amazon has continued to be well-received by investors, especially as its cloud computing unit, Amazon Web Services, shepherds in a new way of doing business.
When announcing fourth quarter results in January, the company shared that AWS has more than 1 million customers worldwide and brought in $2.4 billion in revenue during the quarter, up 69% year-over-year.
As of the end of 2015, 1.59 billion people used the service every month, including 1.44 billion on mobile devices, an increase of 21% year over year, suggesting that user growth isn't slowing any time soon. Perhaps more importantly, Facebook now has 934 million mobile daily active users, an increase of 40 million from last quarter and 25% more than the previous year.
It's clear that advertisers are taking to Facebook in spades, with advertising revenue rising 57% year-over-year to $5.64 billion, 80% of that coming from mobile. Facebook-owned properties, like Instagram and WhatsApp continue to see strong user growth, with Instagram recently surpassing 200,000 advertisers.