Since the March 2009 market lows, there have been 12 times the Nasdaq has fallen by 5% or more, including the current pullback of 6%. The average pullback has been 9% and the largest 18% in August 2011. The technology analysts at Stifel note in a new research report that after these pullbacks, favoring stocks with earnings momentum has been the right strategy. The trick is to find the stocks that match that criterion.

After checking through the damage, the team at Stifel found three stocks down 21% to 27% from recent highs, trading at a lower earnings multiple than a year ago and exhibiting strong fundamental catalysts tied to mobile and cloud-based services. They found a fourth with a huge catalyst to go with sell-off pricing.

Facebook Inc. (NASDAQ: FB) has been knocked down 21% from peak levels, and now trades at the same forward price-to-earnings multiple that is did last year, adjusted for extra shares and dilution. The social media giant has ramped up mobile advertising earnings and has crushed earnings the past three quarters. The Stifel analysts think that Facebook is becoming more central to the overall Internet marketing funnel, gaining share of marketing spending with interest from branding, public relations, direct response and CRM functions, as well as online search and display budgets. The Stifel price target for the stock is $82, and the Thomson/First Call price target is at $73.96. Facebook closed Monday at $56.95.

Read Also: Outside News Drives Fuel Cell Stocks Again

Netflix Inc. (NASDAQ: NFLX) has been crushed, and more than one top Wall Street firm gave it a big upgrade as a time to buy. While recent chatter of other TV-based services have swirled around, they are offered on different platforms and are not fully operational tomorrow to create instant competition. The Stifel team thinks that when earnings are reported the company will show very strong subscriber growth. Stifel has a $475 price target for the stock, and the consensus is at $380.30. Netflix closed Monday at $338.

RetailMeNot Inc. (NASDAQ: SALE) is down almost 30%, and many were blaming the big hit on the recent IPO of Coupons.com. The Stifel analysts point out that the businesses of the two companies do not overlap significantly. Some 75% of the revenue generated by Coupons.com comes from consumer packaged goods companies, while the vast majority of RetailMeNot’s revenue comes from national retailers. The Stifel price target is $42, and the consensus target is even higher at $43.07. The stock closed Monday at $32.14.

Yahoo! Inc. (NASDAQ: YHOO) rounds out the list of four to buy at Stifel, but for very different reasons. Alibaba continues to be the big focus for Yahoo! shareholders. While the Stifel team does not expect any significant change in the metrics from Alibaba, they do expect that Wall Street interest will continue to grow leading up to the expected IPO in the third quarter of this year. They also think that any hint of tax efficiency on the sale of either tranche of the Yahoo! Alibaba stakes would add meaningfully to the sum-of-parts valuation. The Stifel price target is $49, and the consensus target is $40.71. Yahoo! closed Monday at $33.07.

Read Also: Tuesday’s Top Analyst Upgrades and Downgrades

Investors have become increasingly nervous as they are bombarded with bearish commentary from formerly bullish market commentators, and they may be reluctant to buy these tech leaders. While valuations after a five-year run are getting rich, and increased earnings will be required to justify them going forward, the expected improvement in what has been a sluggish economic recovery could bring more fuel to the fire than some think. These top tech names may get a huge lift if their earnings meet or exceed estimates.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.