After the closing bell on Feb 2, social media giant Meta Platforms disappointed investors following dismal fourth-quarter 2021 results. The company lost daily users in a quarter for the first time since it went public in 2012 and forecast a weak revenue guidance for the ongoing quarter. Additionally, Meta Platforms missed on earnings estimates though it beat on revenues.
As such, FB shares tumbled 23% in aftermarket hours on elevated volume, erasing about $200 billion worth its stock market value. 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 - Free Report) and UPHOLDINGS Compound Kings ETF (KNGS - Free Report) — with a substantial allocation to this social media giant.
Earnings in Focus
Adjusted earnings per share came in at $3.67, well below the Zacks Consensus Estimate of $3.78 and down 5% from the year-ago earnings. Revenues climbed 20% year over year to $33.67 billion and edged past the estimated $33.27 billion (read: 5 Sector ETFs That Outperformed in January).
Meta Platforms’ global daily active users declined for the first time to 1.929 billion from $1.93 reported in Q3. This has sparked concerns that Meta Platforms’ flagship product and core advertising moneymaker has plateaued after years of consistent gains. However, daily users are up 5% from the year-ago quarter. Monthly active users grew 4% year over year each to 2.91 billion. The company stated that about 3.59 billion people use Facebook, WhatsApp, Instagram or Messenger (Family of services) each month, and about 2.82 billion people use at least one of the Family of services every day, on average.
The world’s largest social media platform expects revenues in the range of $27-$29 billion for the first quarter. This is well below the Zacks Consensus Estimate of $30.36 billion. Facebook executives blamed increased competition from services such as TikTok and changes in the Apple (AAPL - Free Report) mobile operating system.
ETFs in Focus
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 $12.4 billion in its asset base. It follows the Communication Services Select Sector Index and holds 27 stocks in its basket, with Meta Platforms occupying the top position at 22.8%. About half of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: 5 Sector ETFs That Outperformed in January).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 7 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 114 stocks in its basket, with Meta Platforms occupying the top position at 17.4%. Interactive media & services takes the top spot at 47.6%, while media, entertainment and diversified telecommunication services round off the next three positions.
Fidelity MSCI Communication Services Index ETF has amassed $788.7 million in its asset base and trades in an average daily volume of 131,000 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)
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 top spot with a 17.3% share. Interactive media & services is the top sector, accounting for 47.6% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $3.9 billion and trades in a good volume of 243,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: 2 Tech ETF Areas Likely to Stay Strong Despite Rising Rate Worries).
iShares Global Comm Services ETF (IXP - Free Report)
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 74 stocks in its basket, with Meta Platforms taking the top spot at 16% share. Interactive media & services dominates the fund’s return at 47.9%, followed by integrated telecommunication services (18.7%).
iShares Global Comm Services ETF has amassed $242.7 million in its asset base while trading at an average daily volume of 27,000 shares. Expense ratio comes in at 0.43%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
UPHOLDINGS Compound Kings ETF (KNGS - Free Report)
UPHOLDINGS Compound Kings ETF is actively managed and seeks long-term growth and income primarily by investing in compounders: companies with the potential to reinvest their own cash flow at above-average rates of return. It holds 26 stocks in its basket, with Meta Platforms taking the top spot with 16.7% of assets.
UPHOLDINGS Compound Kings ETF has accumulated $10 million in its asset base and charges 60 bps on an annual basis. It trades in a volume of 3,000 shares per day on average.
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After the closing bell on Feb 2, social media giant Meta Platforms disappointed investors following dismal fourth-quarter 2021 results. The company lost daily users in a quarter for the first time since it went public in 2012 and forecast a weak revenue guidance for the ongoing quarter. Additionally, Meta Platforms missed on earnings estimates though it beat on revenues.
As such, FB shares tumbled 23% in aftermarket hours on elevated volume, erasing about $200 billion worth its stock market value. 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 - Free Report) and UPHOLDINGS Compound Kings ETF (KNGS - Free Report) — with a substantial allocation to this social media giant.
Earnings in Focus
Adjusted earnings per share came in at $3.67, well below the Zacks Consensus Estimate of $3.78 and down 5% from the year-ago earnings. Revenues climbed 20% year over year to $33.67 billion and edged past the estimated $33.27 billion (read: 5 Sector ETFs That Outperformed in January).
Meta Platforms’ global daily active users declined for the first time to 1.929 billion from $1.93 reported in Q3. This has sparked concerns that Meta Platforms’ flagship product and core advertising moneymaker has plateaued after years of consistent gains. However, daily users are up 5% from the year-ago quarter. Monthly active users grew 4% year over year each to 2.91 billion. The company stated that about 3.59 billion people use Facebook, WhatsApp, Instagram or Messenger (Family of services) each month, and about 2.82 billion people use at least one of the Family of services every day, on average.
The world’s largest social media platform expects revenues in the range of $27-$29 billion for the first quarter. This is well below the Zacks Consensus Estimate of $30.36 billion. Facebook executives blamed increased competition from services such as TikTok and changes in the Apple (AAPL - Free Report) mobile operating system.
ETFs in Focus
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 $12.4 billion in its asset base. It follows the Communication Services Select Sector Index and holds 27 stocks in its basket, with Meta Platforms occupying the top position at 22.8%. About half of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (read: 5 Sector ETFs That Outperformed in January).
Communication Services Select Sector SPDR Fund charges 10 bps in annual fees and trades in an average daily volume of 7 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 114 stocks in its basket, with Meta Platforms occupying the top position at 17.4%. Interactive media & services takes the top spot at 47.6%, while media, entertainment and diversified telecommunication services round off the next three positions.
Fidelity MSCI Communication Services Index ETF has amassed $788.7 million in its asset base and trades in an average daily volume of 131,000 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)
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 top spot with a 17.3% share. Interactive media & services is the top sector, accounting for 47.6% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $3.9 billion and trades in a good volume of 243,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: 2 Tech ETF Areas Likely to Stay Strong Despite Rising Rate Worries).
iShares Global Comm Services ETF (IXP - Free Report)
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 74 stocks in its basket, with Meta Platforms taking the top spot at 16% share. Interactive media & services dominates the fund’s return at 47.9%, followed by integrated telecommunication services (18.7%).
iShares Global Comm Services ETF has amassed $242.7 million in its asset base while trading at an average daily volume of 27,000 shares. Expense ratio comes in at 0.43%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.
UPHOLDINGS Compound Kings ETF (KNGS - Free Report)
UPHOLDINGS Compound Kings ETF is actively managed and seeks long-term growth and income primarily by investing in compounders: companies with the potential to reinvest their own cash flow at above-average rates of return. It holds 26 stocks in its basket, with Meta Platforms taking the top spot with 16.7% of assets.
UPHOLDINGS Compound Kings ETF has accumulated $10 million in its asset base and charges 60 bps on an annual basis. It trades in a volume of 3,000 shares per day on average.
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