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Analysis of US Technology stocks
28 Feb 2021 (244 views)

In this post, I analyze eight US technology stocks - Apple, Microsoft, Amazon, Google, Facebook, Tesla, Netflix and Zoom. They are referred to as the FAANG stocks.

All of them have high price earning (PE) ratios, ranging from 1,055 for Tesla to 25.5 for Facebook.

Apple, Microsoft and Facebook have PE ratio of between 30 and 35. 

Only Apple and Microsoft pays a dividend (less than 1% yield). The other stocks do not pay any dividend.

These stocks have a forward PE ratio that is lower than the trailing PE ratio. The investors expect the earnings to grow by 34% to 39% for Facebook and Google and more than 100% for the other stocks.

Amazon has a price to sales (P/S) ratio of 4 times. At the other end of the scale, Zoom has a P/S ratio of 55 times. 

My view. Apple, Microsoft and Google looks "reasonable", if they can achieve their expected growth rate for the coming year. Even so, the PE ratio of around 35 times is still quite expensive. 

The other stocks are grossly overpriced.

Tan Kin Lian

 

 



Analysis of US Technology stocks
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In this post, I analyze eight US technology stocks - Apple, Microsoft, Amazon, Google, Facebook, Tesla, Netflix and Zoom. They are referred to as the FAANG stocks.

All of them have high price earning (PE) ratios, ranging from 1,055 for Tesla to 25.5 for Facebook.

Apple, Microsoft and Facebook have PE ratio of between 30 and 35. 

Only Apple and Microsoft pays a dividend (less than 1% yield). The other stocks do not pay any dividend.

These stocks have a forward PE ratio that is lower than the trailing PE ratio. The investors expect the earnings to grow by 34% to 39% for Facebook and Google and more than 100% for the other stocks.

Amazon has a price to sales (P/S) ratio of 4 times. At the other end of the scale, Zoom has a P/S ratio of 55 times. 

My view. Apple, Microsoft and Google looks "reasonable", if they can achieve their expected growth rate for the coming year. Even so, the PE ratio of around 35 times is still quite expensive. 

The other stocks are grossly overpriced.

Tan Kin Lian