Facebook's Stock Among The Top Picks Heading Into Earnings

Shares of Facebook Inc FB have gained more than 40 percent in 2017. Investors looking to add the stock to their portfolio or initiate a new one should consider doing so before next week's earnings report, Erin Gibbs, a portfolio manager with S&P Global suggested during a recent CNBC "Trading Nation" segment.

Facebook has established a reputation of beating Wall Street estimates. Specifically, earnings before taxes came in higher than expected by 17 percent, 11 percent, 9 percent, and nearly 5 percent over the past four quarters, Gibbs noted. While the severity of the earnings beat has declined over the past few quarter, this is nevertheless a "normal progression" for a company with larger earnings.

Facebook's stock is by no means expensive and remains "reasonable" at 32 times forward earnings, while earnings per share growth over the next year is just 3 percent -- a "fairly low" bar.

Facebook's appeal extends beyond the current quarter and double-digit growth is expected in 2018, Gibbs added. But before that can happen, the company needs to report a solid beat in the quarter that reaffirms it's "well on track" to deliver strong growth.

"This period of temporary lowered outlook and lowered valuations seems like a decent place to get in before [Facebook] starts showing Wall Street they have underestimated one of the better-managed companies in tech," she told CNBC.

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