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After the closing bell on Apr 29, Facebook came up with mixed first-quarter 2020 results wherein it beat estimates on revenues but misses on earnings. Shares of Facebook rose more than 10% in aftermarket hours on elevated volumes.
Adjusted earnings per share came in at $1.71, below the Zacks Consensus Estimate of $1.73 but improved from the year-ago earnings of 85 cents. Revenues increased 18% year over year to $17.74 billion and edged past the estimated $17.29 billion. Notably, advertising revenues spiked 17% year over year to $17.4 billion.
The pandemic has led to a surge in online communication among Facebook members and live-stream gaming. FaceTime and video group calling have skyrocketed 1,000% over the past month. Daily and monthly active users grew 11% and 10% year over year, respectively, to 1.73 billion and 2.60 billion. The company estimates that about 2.99 billion people use Facebook, WhatsApp, Instagram or Messenger (Family of services) each month, and about 2.36 billion people use at least one of the Family of services every day on average (read: Should You Buy Facebook ETFs as Coronavirus Boosts Traffic?).
Though the social media giant did not provide any guidance for the second quarter due to uncertainty surrounding COVID-19 pandemic, it said advertising revenues have shown "signs of stability" in the first three weeks of April after plunging in March.
Currently, Facebook has a Zacks Rank #3 (Hold) and a Growth Score of B. It belongs to a top-ranked Zacks industry (top 21%).
ETFs to Watch
Given this, ETFs having a larger allocation to the networking giant are in focus post Facebook results. We have highlighted six of them in detail below:
Communication Services Select Sector SPDR (XLC - Free Report)
This ETF offers exposure to the communication services sector of the S&P 500 Index and has accumulated $7.4 billion in its asset base. It follows the Communication Services Select Sector Index and holds 26 stocks in its basket, with Facebook occupying the top position at 19.8%. About 45% of the portfolio is allocated to interactive media & services, while entertainment, media, and diversified telecommunication services round off the next three. The product charges 13 bps in annual fees and trades in average daily volume of 4.3 million shares. It has a Zacks ETF Rank #2 (Buy) (read: Stocks Look Set for a Rally: Top-Ranked ETFs to Buy).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
This fund follows the MSCI USA IMI Communication Services 25/50 Index. It holds 104 stocks in its basket with Facebook occupying the top position at 15.3%. Interactive media & services takes the top spot at nearly 42.1%, while media, entertainment, and diversified telecommunication services round off the next three spots. The product has amassed $432.1 million in its asset base and trades in average daily volume of 143,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
This fund also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 112 stocks in its basket, Facebook takes the second spot with 15.2% share. Interactive media & services is the top sector, accounting for 43% of the portfolio, while integrated telecommunication services, cable & satellite, and movies & entertainment round off the next three. VOX has AUM of $1.9 billion and trades in a good volume of 2760,000 shares a day on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
This 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 68 stocks in its basket with Facebook taking the top spot at 12.1% share. Interactive media & services dominate the fund’s return at 42.6%, while integrated telecommunication services, wireless telecommunication services and movies & entertainment round off the next three spot with double-digit exposure. The fund has amassed $242.3 million in its asset base, while trading in average daily volume of 69,000 shares. Expense ratio came in at 0.46%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).
This is a pure-play ETF in the global social media space and has amassed $115.1 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 40 securities in the basket. Of these firms, Facebook takes the second spot, making up for 9.2% of assets. The ETF charges 0.65% in annual fees and sees moderate trading volumes of roughly 24,000 shares a day. The fund has a Zacks ETF Rank #2 with a High risk outlook.
This 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 stocks in its basket in equal proportion with Facebook share coming in at 10%. The product has accumulated $36 million in its asset base and charges 58 bps in annual fees. It trades in a meager volume of 8,000 shares a day on average.
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Facebook Soars Post Q1 Earnings: ETFs in Focus
After the closing bell on Apr 29, Facebook came up with mixed first-quarter 2020 results wherein it beat estimates on revenues but misses on earnings. Shares of Facebook rose more than 10% in aftermarket hours on elevated volumes.
Adjusted earnings per share came in at $1.71, below the Zacks Consensus Estimate of $1.73 but improved from the year-ago earnings of 85 cents. Revenues increased 18% year over year to $17.74 billion and edged past the estimated $17.29 billion. Notably, advertising revenues spiked 17% year over year to $17.4 billion.
The pandemic has led to a surge in online communication among Facebook members and live-stream gaming. FaceTime and video group calling have skyrocketed 1,000% over the past month. Daily and monthly active users grew 11% and 10% year over year, respectively, to 1.73 billion and 2.60 billion. The company estimates that about 2.99 billion people use Facebook, WhatsApp, Instagram or Messenger (Family of services) each month, and about 2.36 billion people use at least one of the Family of services every day on average (read: Should You Buy Facebook ETFs as Coronavirus Boosts Traffic?).
Though the social media giant did not provide any guidance for the second quarter due to uncertainty surrounding COVID-19 pandemic, it said advertising revenues have shown "signs of stability" in the first three weeks of April after plunging in March.
Currently, Facebook has a Zacks Rank #3 (Hold) and a Growth Score of B. It belongs to a top-ranked Zacks industry (top 21%).
ETFs to Watch
Given this, ETFs having a larger allocation to the networking giant are in focus post Facebook results. We have highlighted six of them in detail below:
Communication Services Select Sector SPDR (XLC - Free Report)
This ETF offers exposure to the communication services sector of the S&P 500 Index and has accumulated $7.4 billion in its asset base. It follows the Communication Services Select Sector Index and holds 26 stocks in its basket, with Facebook occupying the top position at 19.8%. About 45% of the portfolio is allocated to interactive media & services, while entertainment, media, and diversified telecommunication services round off the next three. The product charges 13 bps in annual fees and trades in average daily volume of 4.3 million shares. It has a Zacks ETF Rank #2 (Buy) (read: Stocks Look Set for a Rally: Top-Ranked ETFs to Buy).
Fidelity MSCI Communication Services Index ETF (FCOM - Free Report)
This fund follows the MSCI USA IMI Communication Services 25/50 Index. It holds 104 stocks in its basket with Facebook occupying the top position at 15.3%. Interactive media & services takes the top spot at nearly 42.1%, while media, entertainment, and diversified telecommunication services round off the next three spots. The product has amassed $432.1 million in its asset base and trades in average daily volume of 143,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Vanguard Communication Services ETF (VOX - Free Report)
This fund also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 112 stocks in its basket, Facebook takes the second spot with 15.2% share. Interactive media & services is the top sector, accounting for 43% of the portfolio, while integrated telecommunication services, cable & satellite, and movies & entertainment round off the next three. VOX has AUM of $1.9 billion and trades in a good volume of 2760,000 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 - Free Report)
This 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 68 stocks in its basket with Facebook taking the top spot at 12.1% share. Interactive media & services dominate the fund’s return at 42.6%, while integrated telecommunication services, wireless telecommunication services and movies & entertainment round off the next three spot with double-digit exposure. The fund has amassed $242.3 million in its asset base, while trading in average daily volume of 69,000 shares. Expense ratio came in at 0.46%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: ETFs to Tap on Soaring E-Commerce Sales Amid Coronavirus).
Global X Social Media Index ETF (SOCL - Free Report)
This is a pure-play ETF in the global social media space and has amassed $115.1 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 40 securities in the basket. Of these firms, Facebook takes the second spot, making up for 9.2% of assets. The ETF charges 0.65% in annual fees and sees moderate trading volumes of roughly 24,000 shares a day. The fund has a Zacks ETF Rank #2 with a High risk outlook.
MicroSectors FANG+ ETN (FNGS - Free Report)
This 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 stocks in its basket in equal proportion with Facebook share coming in at 10%. The product has accumulated $36 million in its asset base and charges 58 bps in annual fees. It trades in a meager volume of 8,000 shares a day on average.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>