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Cramer: Facebook And GE Benefited From A Low Bar

February 1, 2019 11:36 am
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Cramer: Facebook And GE Benefited From A Low Bar

Shares of Facebook, Inc. (NASDAQ:FB) gained more than 10 percent in reaction to its fourth-quarter earnings report not to be outdone by General Electric Company (NYSE:GE)'s best single-day percentage gain in nearly a decade in reaction to its earnings.

What do both of these companies have in common? They were up against low expectation, according to CNBC's Jim Cramer.

More Upside?

Heading into Facebook's print, memories of recent privacy and data related scandals remained fresh on investors minds, Cramer said during his daily "Mad Money" show. Investors were also concerned with a potential slowdown in revenue and user metrics.

Much like a "coiled spring" Facebook's stock soared after its earnings report showed it's in a "much better place" today now that its costs are fixed and revenue is rising, Cramer said. When a company like Facebook has operative leverage, it can "practically print money."

"I think the stock still has a lot more upside, even after today's glorious run," Cramer said Thursday.

GE: The 'Worst Is Over'

Cramer said in late 2017, GE's entire board of directors deserve to be placed on his "wall of shame" but the sentiment has changed under new CEO Larry Culp. GE's earnings print Thursday gives investors a "sense of confidence that the worst is over."

Culp presented to investors a game-plan that's likely to remove the company from the "do-not-resuscitate list," Cramer said. But the company will merely move on to the "ICU" — a "major improvement" nevertheless.

'Expectations Are Everything'

Throughout earnings season what matters most is expectations and when they move lower ahead of an earnings report all that is needed is "decent numbers" to help lift a stock, Cramer said: "So scour the losers here; they may be ready for the comeback of a lifetime."

Related Links:

Here's What Wall Street Thinks About Facebook's Big Earnings Beat

Analysts React To GE's Mixed Quarter


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