Google, The Laggard Of The FANG Stocks, May Catch Up This Year

Jim Cramer and Bob Lang coined the acronym "FANG" in 2013 which refers to Facebook Inc FB, Amazon.com, Inc. AMZN, Netflix, Inc. NFLX and Google/Alphabet Inc GOOG GOOGL.

The "FANG" trade has proven itself to be a winner although among the four names, certain stocks have performed better than others. In fact, over the past year, Alphabet's stock has notably lagged the three other names but Ross Sandler of Barclays thinks this will change.

Low Bar For Q1

In a research report on Wednesday, Sandler argued that Alphabet's underperformance versus the FANG group will "start to catch up" in 2017, partly due to the company's lower bar heading into earnings season. Specifically, much of the attention heading into Alphabet's earnings report is the YouTube ad scandal but the analyst believes this is a "non-event" for Alphabet's financials based on how YouTube's ad auction is designed.

"Stepping back, Google usually outperforms on quarters like this where expectations are low and sentiment is negative," the analyst wrote. "Hence, we would add to positions into the print."

Sandler also noted his checks have been "consistently solid" all quarter, but investors shouldn't expect any upside to his $17 billion Sites revenue estimate.

Bottom line, Sandler stated that the quarter won't be one where Alphabet posts the "usual couple hundred million upside" in revenue.

See Also:

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