Facebook's Stock Among The Top Picks Heading Into Earnings

Shares of Facebook Inc (NASDAQ: FB) have gained more than 40 percent in 2017. Investors looking to add the stock to their portfolio or initiate a new one should consider doing so before next week's earnings report, Erin Gibbs, a portfolio manager with S&P Global suggested during a recent CNBC "Trading Nation" segment.

Facebook has established a reputation of beating Wall Street estimates. Specifically, earnings before taxes came in higher than expected by 17 percent, 11 percent, 9 percent, and nearly 5 percent over the past four quarters, Gibbs noted. While the severity of the earnings beat has declined over the past few quarter, this is nevertheless a "normal progression" for a company with larger earnings.

Facebook's stock is by no means expensive and remains "reasonable" at 32 times forward earnings, while earnings per share growth over the next year is just 3 percent -- a "fairly low" bar.

Facebook's appeal extends beyond the current quarter and double-digit growth is expected in 2018, Gibbs added. But before that can happen, the company needs to report a solid beat in the quarter that reaffirms it's "well on track" to deliver strong growth.

"This period of temporary lowered outlook and lowered valuations seems like a decent place to get in before [Facebook] starts showing Wall Street they have underestimated one of the better-managed companies in tech," she told CNBC.

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