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Amazon Posts Slowest Sales Growth in 2 Decades: ETFs in Focus
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After the closing bell on Thursday, Amazon (AMZN - Free Report) posted disappointing first-quarter results. The e-commerce giant missed on both earnings and revenue estimates. The weak results have pushed AMZN shares lower by as much as 10% in aftermarket hours on elevated volume.
This has put focus on ETFs with a substantial allocation to this online behemoth. These include ProShares Online Retail ETF (ONLN - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report) .
Earnings per share came in at $4.24, widely missing the Zacks Consensus Estimate of $8.73 and year-ago earnings of $15.79. Revenues grew 7% year over year to $116.4 billion but fell short of the consensus estimate of $117 billion. This marks the company’s slowest revenue growth in more than two decades. The dismal performance was attributable to the pandemic and the subsequent war in Ukraine (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Amazon’s cloud computing business — Amazon Web Services — continued to shine, with revenues surging 36.6% year over year to $18.4 billion. The e-commerce giant offered downbeat revenue guidance of $116-$121 billion for the second quarter of 2022, suggesting 3-7% growth from the year-ago reported number. The upper end of the range is well below the current Zacks Consensus Estimate of $126.29 billion, which indicates 11.7% growth.
ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 40 stocks in its basket. Amazon is the top firm accounting for 26.1% of the portfolio.
ProShares Online Retail ETF has amassed $422.2 million in its asset base and currently trades in a moderate volume of around 59,000 shares a day on average. It charges 58 bps in annual fees from investors.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 329 stocks in its basket. Of these, Amazon takes the top spot with 23.6% share. Internet & direct marketing retail makes up for the top sector, with 26% share, followed by automobiles (18.6%), specialty retail (17.7%) and hotels restaurants & leisure (17.1%).
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.3 billion in its asset base while trading in a good volume of around 133,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Another Banner Quarter for Tesla: ETFs to Buy).
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 305 stocks in its basket. Of these, Amazon occupies the top position, with a 22.3% allocation. Internet & direct marketing retail takes the largest share at 24.9%, while automobile manufacturers, restaurants and home improvement retail round off the next three spots.
VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 5.7 million shares a day. The product has managed about $5.7 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 60 securities in its basket, Amazon takes the top spot with 22% of assets. Internet & direct marketing retail dominates about 23.3% of the portfolio, while automobiles, hotels, restaurants and leisure, and specialty retail round off the next three spots with a double-digit allocation each.
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $18 billion and an average daily volume of around 11.7 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: A 50-Bp Rate Hike in May? Sector ETFs to Win).
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with an 22.4% share.
VanEck Vectors Retail ETF has amassed $199 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 9,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #3 with a Medium risk outlook.
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Amazon Posts Slowest Sales Growth in 2 Decades: ETFs in Focus
After the closing bell on Thursday, Amazon (AMZN - Free Report) posted disappointing first-quarter results. The e-commerce giant missed on both earnings and revenue estimates. The weak results have pushed AMZN shares lower by as much as 10% in aftermarket hours on elevated volume.
This has put focus on ETFs with a substantial allocation to this online behemoth. These include ProShares Online Retail ETF (ONLN - Free Report) , Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report) .
Earnings per share came in at $4.24, widely missing the Zacks Consensus Estimate of $8.73 and year-ago earnings of $15.79. Revenues grew 7% year over year to $116.4 billion but fell short of the consensus estimate of $117 billion. This marks the company’s slowest revenue growth in more than two decades. The dismal performance was attributable to the pandemic and the subsequent war in Ukraine (read: Why Value ETFs May Outdo Growth for the Rest of 2022).
Amazon’s cloud computing business — Amazon Web Services — continued to shine, with revenues surging 36.6% year over year to $18.4 billion. The e-commerce giant offered downbeat revenue guidance of $116-$121 billion for the second quarter of 2022, suggesting 3-7% growth from the year-ago reported number. The upper end of the range is well below the current Zacks Consensus Estimate of $126.29 billion, which indicates 11.7% growth.
ETFs in Focus
ProShares Online Retail ETF (ONLN - Free Report)
ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels, and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 40 stocks in its basket. Amazon is the top firm accounting for 26.1% of the portfolio.
ProShares Online Retail ETF has amassed $422.2 million in its asset base and currently trades in a moderate volume of around 59,000 shares a day on average. It charges 58 bps in annual fees from investors.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 329 stocks in its basket. Of these, Amazon takes the top spot with 23.6% share. Internet & direct marketing retail makes up for the top sector, with 26% share, followed by automobiles (18.6%), specialty retail (17.7%) and hotels restaurants & leisure (17.1%).
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.3 billion in its asset base while trading in a good volume of around 133,000 shares a day on average. It charges 8 bps in annual fees from investors and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Another Banner Quarter for Tesla: ETFs to Buy).
Vanguard Consumer Discretionary ETF (VCR - Free Report)
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index and holds 305 stocks in its basket. Of these, Amazon occupies the top position, with a 22.3% allocation. Internet & direct marketing retail takes the largest share at 24.9%, while automobile manufacturers, restaurants and home improvement retail round off the next three spots.
VCR charges investors 10 bps in annual fees, while volume is moderate at nearly 5.7 million shares a day. The product has managed about $5.7 billion in its asset base and carries a Zacks ETF Rank #2 with a Medium risk outlook.
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space by tracking the Consumer Discretionary Select Sector Index. Holding 60 securities in its basket, Amazon takes the top spot with 22% of assets. Internet & direct marketing retail dominates about 23.3% of the portfolio, while automobiles, hotels, restaurants and leisure, and specialty retail round off the next three spots with a double-digit allocation each.
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $18 billion and an average daily volume of around 11.7 million shares. It charges 0.10% in expense ratio and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: A 50-Bp Rate Hike in May? Sector ETFs to Win).
VanEck Vectors Retail ETF (RTH - Free Report)
VanEck Vectors Retail ETF provides exposure to the 25 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Amazon takes the top position in the basket with an 22.4% share.
VanEck Vectors Retail ETF has amassed $199 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 9,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #3 with a Medium risk outlook.