Some FANGs Are Sharper Than Others: Wedbush Remains Positive On Facebook, Amazon, Negative On Netflix

After downgrading Alphabet Inc GOOGL to Underperform on September 27, Wedbush reiterated its positive views on Facebook Inc FB and Amazon.com, Inc. AMZN. The firm didn't change its view of negative on Netflix, Inc. NFLX.

Facebook stands to gain from higher monetization driven by continued investments and user engagement. The firm thinks that ad platforms from its Messenger, WhatsApp and Instagram would offer considerable returns in upcoming years driving margins even higher. Additionally, VR platform is expected to change the communication ways of users.

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Analysts Michael Pachter, Alicia Reese and Nick McKay said, "We believe that Facebook's network effect and large user base create a sufficiently large moat that will allow it to remain the dominant social media platform for the next decade and beyond."

Wedbush expects Amazon to gain from its AWS and video optionality apart from SaaS in a better margin rate. The firm thinks the company controlled its spending contributing to higher margin for rapid EPS growth.

As far as Netflix is concerned, the brokerage sees risks coming from compelling alternatives and content spending. The recent discussions with two former executives supported its opinion apart from the quality suffering citing competition for original content.

Wedbush assigned rating for following companies:

• Maintains Outperform rating on Facebook with $162 target price
• Reiterated Outperform rating and $900 price objective
• Maintains Underperform rating and $50 price target on Netflix