In the second week of earnings, we saw some strong results, particularly from the Internet sector. Two companies that didn’t disappoint are Facebook Inc (NASDAQ:FB) and Netflix, Inc. (NASDAQ:NFLX). Cantor Fitzgerald analysts have increased their price targets for Facebook and Netflix in the wake of their reports.

Facebook Inc (FB), Netflix, Inc. (NFLX) Cantor Internet Index outperforms

In a report dated July 28, 2014, analysts Youssef Squali, Naved Khan and Kip Paulson report that last week, their Cantor Internet Index outperformed the broader market. The index increased 3.3%, compared to the 1.5% increase in the S&P 500. So far overall, their Internet group saw in line to better top light growth across the board. This suggests good things for the next couple of earnings weeks.

However, their index remains down 5.5% for the year so far, while the S&P 500 gained 7.5%. Currently from a valuation standpoint, the Cantor Internet Index is trading at about 14.9 times EV / NTM EBITDA, which is toward the high end of the five-year rolling average, which is six to 15.6 times and the peak before the recession of 18 times.

Facebook Inc FB
Facebook Inc FB

Facebook Inc (FB), Netflix, Inc. (NFLX) price target increased

The Cantor Fitzgerald team maintained their Buy rating but increased their price target for Facebook from $80 to $82 per share after the social network’s earnings report. They note that the company “comfortably” beat consensus estimates even though it had tough year over year comparisons. Also Facebook’s mobile ad revenue soared far beyond expectations and was the June quarter’s main upside driver.

They expect growth to continue this year and next and margins to improve. They said Facebook remains one of their top picks for this year because it is the biggest and most-engaged Internet platform that offers large scale personalized marketing. Other reasons they see it as a top pick is the company’s continued transition to mobile and still untapped monetization potential for WhatsApp and Instagram.

Netflix’s price target increased

The analysts also maintained their Buy rating but increased their price target for Netflix from $425 to $500 per share after the company’s June quarter earnings report. They say international expansion has been driving Netflix’s strong results. Other key drivers are emerging margin leverage and strong pricing power.

They see plenty of opportunity for growth at Netflix, as the company is still only addressing about a third of global broadband households. By launching in Germany, Austria, France, Belgium, Luxembourg and Switzerland, the company will be addressing about 180 million international broadband households, which is about double the number in the U.S. They say the global total addressable market stands at 728 million currently.