Which Internet Stocks Have the Strongest Earnings Trends Ahead of Google Earnings?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

Here’s your Cheat Sheet to how the top 4 internet stocks rank via earnings trends:


Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 8,541 8,727 9,156 11,650 14,070
Diluted EPS ($) 1.36 1.83 1.36 2.46 1.99

We see that Ebay has been growing sales nicely, but earnings seem to fall off every other year.

Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Dec. 31, 2011 Mar. 31, 2012 Jun. 30, 2012 Sep. 30, 2012 Dec. 31, 2012
Revenue ($) in millions 3,380 3,277 3,398 3,404 3,992
Diluted EPS ($) 1.51 0.44 0.53 0.45 0.57

Though sales have been somewhat static in four out of five quarters, there’s a nice rise in the holiday quarter 2012. Earnings are somewhat unpredictable…