Which Website Stocks Have the Strongest Earnings Trends: Yahoo, Google, Microsoft, InterActiveCorp or AOL?

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 5 website stocks rank via earnings trends:

Yahoo! Inc. (NASDAQ:YHOO): Current Price $21.36

Fiscal Year 2008 2009 2010 2011 2012
Revenue ($) in millions 7,209 6,460 6,325 4,984 4,987
Diluted EPS ($) 0.29 0.42 0.90 0.82 3.28

Though annual revenue at Yahoo has been sliding, and is down 30% in 2012 compared to 2008, the company reported an excellent EPS in 2012.

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 ($) in millions 1,324 1,221 1,218 1,202 1,346
Diluted EPS ($) 0.24 0.23 0.18 2.64 0.23

Is the┬áMarissa Mayer effect at work here? Revenue has grown impressively in the latest quarter, though EPS has dived. Sadly this means we’ll have to pass on Yahoo…