Social media giant Meta Platforms (META - Free Report) is set to release fourth-quarter fiscal 2022 results on Feb 1 after market close. The stock has jumped 62.9% over the past three months and has underperformed the industry’s average of 12.2%. The outperformance might continue as Meta Platforms has a reasonable chance of beating on earnings.
This has put focus on ETFs — Communication Services Select Sector SPDR Fund (XLC - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , iShares Global Comm Services ETF (IXP) and MicroSectors FANG+ ETN (FNGS - Free Report) — with a substantial allocation to this social media giant.
Earnings Whispers
Meta Platforms has a Zacks Rank #3 (Hold) and an Earnings ESP of +13.39%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Meta Platforms saw a positive earnings estimate revision of 11 cents over the past 7 days for the soon-to-be-reported quarter. The Zacks Consensus Estimate for Q4 earnings indicates a decline of 39.2% from the year-ago reported figure. Revenues are expected to decrease 7% in the to-be-reported quarter. Meta Platforms delivered a negative earnings surprise of 2.55% in the past four quarters.
The stock belongs to a top-ranked Zacks Industry (top 24%) and has a VGM Score of A. The Zacks Consensus Estimate for the average target price is $170.14, with nearly 64% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings (read: 5 Tech ETFs Riding High on Sectors' Comeback to Start 2023).
What to Watch
In the last earnings conference call, the world’s largest social media platform expects to post another year-over-year revenue drop in the current quarter. It expects revenues in the range of $30-$32.5 billion for the fourth quarter given the broader fallout in digital advertisement.
ETFs to Watch
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services, and has accumulated $9 billion in its asset base. It follows the Communication Services Select Sector Index and holds 25 stocks in its basket, with Meta Platforms occupying the top position at 16.6%. About 40.6% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two.
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #3 (Hold).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 113 stocks in its basket, with Meta Platforms occupying the second position at 10.7%.
Fidelity MSCI Communication Services Index ETF has amassed $509.5 million in its asset base and trades in an average daily volume of 128,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Communication Services ETFs here).
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 113 stocks in its basket, Meta Platform takes the second spot with a 10.5% share. Interactive media & services is the top sector, accounting for 37% of the portfolio, while movies & entertainment, integrated telecommunication services, and cable & satellite round off the next three.
Vanguard Communication Services ETF has AUM of $2.6 billion and trades in a good volume of 305,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares Global Comm Services ETF (IXP)
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 73 stocks in its basket, with Meta Platforms taking the third spot at 9.6% share. Interactive media & services dominates the fund’s return at 42.8%, followed by integrated telecommunication services (19.6%).
iShares Global Comm Services ETF has amassed $243.5 million in its asset base while trading at an average daily volume of 24,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Meta Platform accounting for a 10% share (read: ETFs to Buy on Tesla's Record-Breaking Q4 Results).
MicroSectors FANG+ ETN has accumulated $53.3 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 27,000 shares and has a Zacks ETF Rank #3.
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Social media giant Meta Platforms (META - Free Report) is set to release fourth-quarter fiscal 2022 results on Feb 1 after market close. The stock has jumped 62.9% over the past three months and has underperformed the industry’s average of 12.2%. The outperformance might continue as Meta Platforms has a reasonable chance of beating on earnings.
This has put focus on ETFs — Communication Services Select Sector SPDR Fund (XLC - Free Report) , Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) , Vanguard Communication Services ETF (VOX - Free Report) , iShares Global Comm Services ETF (IXP) and MicroSectors FANG+ ETN (FNGS - Free Report) — with a substantial allocation to this social media giant.
Earnings Whispers
Meta Platforms has a Zacks Rank #3 (Hold) and an Earnings ESP of +13.39%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Meta Platforms saw a positive earnings estimate revision of 11 cents over the past 7 days for the soon-to-be-reported quarter. The Zacks Consensus Estimate for Q4 earnings indicates a decline of 39.2% from the year-ago reported figure. Revenues are expected to decrease 7% in the to-be-reported quarter. Meta Platforms delivered a negative earnings surprise of 2.55% in the past four quarters.
The stock belongs to a top-ranked Zacks Industry (top 24%) and has a VGM Score of A. The Zacks Consensus Estimate for the average target price is $170.14, with nearly 64% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings (read: 5 Tech ETFs Riding High on Sectors' Comeback to Start 2023).
What to Watch
In the last earnings conference call, the world’s largest social media platform expects to post another year-over-year revenue drop in the current quarter. It expects revenues in the range of $30-$32.5 billion for the fourth quarter given the broader fallout in digital advertisement.
ETFs to Watch
Communication Services Select Sector SPDR Fund (XLC - Free Report)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services, and has accumulated $9 billion in its asset base. It follows the Communication Services Select Sector Index and holds 25 stocks in its basket, with Meta Platforms occupying the top position at 16.6%. About 40.6% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two.
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #3 (Hold).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 113 stocks in its basket, with Meta Platforms occupying the second position at 10.7%.
Fidelity MSCI Communication Services Index ETF has amassed $509.5 million in its asset base and trades in an average daily volume of 128,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook (see: all the Communication Services ETFs here).
Vanguard Communication Services ETF (VOX - Free Report)
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 113 stocks in its basket, Meta Platform takes the second spot with a 10.5% share. Interactive media & services is the top sector, accounting for 37% of the portfolio, while movies & entertainment, integrated telecommunication services, and cable & satellite round off the next three.
Vanguard Communication Services ETF has AUM of $2.6 billion and trades in a good volume of 305,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares Global Comm Services ETF (IXP)
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 73 stocks in its basket, with Meta Platforms taking the third spot at 9.6% share. Interactive media & services dominates the fund’s return at 42.8%, followed by integrated telecommunication services (19.6%).
iShares Global Comm Services ETF has amassed $243.5 million in its asset base while trading at an average daily volume of 24,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
MicroSectors FANG+ ETN (FNGS - Free Report)
MicroSectors FANG+ ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index designed to provide exposure to a group of highly traded growth stocks of next-generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket, with Meta Platform accounting for a 10% share (read: ETFs to Buy on Tesla's Record-Breaking Q4 Results).
MicroSectors FANG+ ETN has accumulated $53.3 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 27,000 shares and has a Zacks ETF Rank #3.
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