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’).
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Here’s your Cheat Sheet to how the top 4 internet stocks rank via earnings trends:
eBay Inc. (NASDAQ:EBAY)
|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…