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The renowned social media platform Meta Platforms (META - Free Report) is scheduled to report earnings on Oct 25 after market close. Let’s take a closer look at its fundamentals ahead of the earnings release. The stock has surged 147% this year (as of Oct 20, 2023) and but gained a muted 2.6% past month, hurt by rising rate worries.
Earnings Whispers
Meta has an Earnings ESP of +3.98% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 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. The stock has an upbeat VGM (Value-Growth-Momentum) score of “A.”
The company saw positive Zacks Consensus Earnings estimate revision of 58 cents to $3.57 over the past 90 days for the to-be-reported quarter and of 4 cents over the past two months.Most Accurate Estimate is $3.71. This is a good indicator for the stock.Top line expectations have also increased, with the $33.4 billion quarterly estimate up 2.5% in the past three months.The Zacks Consensus Estimate for the September quarter indicates substantial year-over-year earnings growth of 117.7% and revenue growth of 20.6%.
Factors to Watch
Advertising revenues make up a solid portion of the total sales and is under focus ahead of earnings release. Global economic slowdown may cause sluggish ad revenues. Advertising revenues are expected to witness a CAGR of 12.5% per our model estimate while the Zacks Consensus Estimate for Advertising Revenue stands at $32.9 billion, reflecting a notable 20% increase year-over-year.
User growth is another area to watch for. Zacks Consensus Estimate for Daily Active User (Worldwide) is 2080. In the past four quarters, Meta was able to beat on this metric twice, i.e., in the past two quarters. The latest turnaround is user growth was helped by Asia-Pacific and Europe. Now we have to see if the company can maintain the last winning momentum in these two regions.
The company is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects. Investors will be eager to listen some developments on the company’s AI initiatives.
Against this backdrop, below we highlight a few Meta-heavy ETFs that will be under watch at the current scenario.
ETFs in Focus
Communication Services Select Sector SPDR Fund (XLC - Free Report) – Meta has 24.38% Exposure
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) – Meta has 21.06% Exposure
Vanguard Communication Services ETF (VOX - Free Report) – Meta has 20.1% Exposure
iShares Global Comm Services ETF (IXP - Free Report) – Meta has 19.2% Exposure
Global X Social Media ETF (SOCL - Free Report) – Meta has 14.65% Exposure
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Earnings Preview of Meta Platforms: ETFs in Focus
The renowned social media platform Meta Platforms (META - Free Report) is scheduled to report earnings on Oct 25 after market close. Let’s take a closer look at its fundamentals ahead of the earnings release. The stock has surged 147% this year (as of Oct 20, 2023) and but gained a muted 2.6% past month, hurt by rising rate worries.
Earnings Whispers
Meta has an Earnings ESP of +3.98% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 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. The stock has an upbeat VGM (Value-Growth-Momentum) score of “A.”
The company saw positive Zacks Consensus Earnings estimate revision of 58 cents to $3.57 over the past 90 days for the to-be-reported quarter and of 4 cents over the past two months.Most Accurate Estimate is $3.71. This is a good indicator for the stock.Top line expectations have also increased, with the $33.4 billion quarterly estimate up 2.5% in the past three months.The Zacks Consensus Estimate for the September quarter indicates substantial year-over-year earnings growth of 117.7% and revenue growth of 20.6%.
Factors to Watch
Advertising revenues make up a solid portion of the total sales and is under focus ahead of earnings release. Global economic slowdown may cause sluggish ad revenues. Advertising revenues are expected to witness a CAGR of 12.5% per our model estimate while the Zacks Consensus Estimate for Advertising Revenue stands at $32.9 billion, reflecting a notable 20% increase year-over-year.
User growth is another area to watch for. Zacks Consensus Estimate for Daily Active User (Worldwide) is 2080. In the past four quarters, Meta was able to beat on this metric twice, i.e., in the past two quarters. The latest turnaround is user growth was helped by Asia-Pacific and Europe. Now we have to see if the company can maintain the last winning momentum in these two regions.
The company is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects. Investors will be eager to listen some developments on the company’s AI initiatives.
Against this backdrop, below we highlight a few Meta-heavy ETFs that will be under watch at the current scenario.
ETFs in Focus
Communication Services Select Sector SPDR Fund (XLC - Free Report) – Meta has 24.38% Exposure
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report) – Meta has 21.06% Exposure
Vanguard Communication Services ETF (VOX - Free Report) – Meta has 20.1% Exposure
iShares Global Comm Services ETF (IXP - Free Report) – Meta has 19.2% Exposure
Global X Social Media ETF (SOCL - Free Report) – Meta has 14.65% Exposure