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.