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After the closing bell on Apr 26, Facebook’s parent company Meta Platforms (META - Free Report) reported solid first-quarter 2023 results, wherein it outpaced revenue and earnings estimates. The company issued upbeat revenue guidance amid the ongoing progress to bring down costs (read: Leveraged Tech ETFs to Cash in on Upbeat Big Tech Earnings).
META shares spiked as much as 11% to their highest level since January 2022 in aftermarket hours on elevated volume. Investors should buy ETFs having a large allocation to this social media giant to tap the opportune moment. These include 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) .
Earnings in Focus
Adjusted earnings per share came in at $2.20, topping the Zacks Consensus Estimate of $1.96 but declining from $2.72 the year-ago quarter. Revenues grew 3% year over year to $28.6 billion and came above the estimated $27.5 billion. This marks the first revenue increase in nearly a year driven by the strong growth in ad impressions, which rose 26% year over year in Meta's "Family of Apps" (Facebook, Instagram and WhatsApp).
Meta Platforms’ global daily active users increased 4% year over year to 2.04 billion. Monthly active users grew 2% year over year to 2.99 billion. The company stated that about 3.02 billion people used at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) every day, on average in March.
The world’s largest social media platform expects to post revenues in the range of $29.5-$32 billion for the second quarter. The Zacks Consensus Estimate is pegged at $27.56 billion.
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 $10.8 billion in its asset base. It follows the Communication Services Select Sector Index and holds 24 stocks in its basket, with Meta Platforms occupying the top position at 22.2% share. About 47.5% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (see: all the Communication ETFs here).
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 #2 (Buy).
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 111 stocks in its basket, with Meta Platforms occupying the top position at 15.5%.
Fidelity MSCI Communication Services Index ETF has amassed $579.1 million in its asset base and trades in an average daily volume of 97,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 115 stocks in its basket, Meta Platform takes the top spot with a 15.4% share. Interactive media & services is the top sector, accounting for 44.3% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $2.7 billion and trades in a good volume of 180,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) 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 69 stocks in its basket, with Meta Platforms taking the top spot at 12.8% share. Interactive media & services dominates the fund’s return at 47.1%, followed by integrated telecommunication services (19.6%).
iShares Global Comm Services ETF has amassed $266.8 million in its asset base while trading at an average daily volume of 19,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: How to Invest in the Metaverse with ETFs).
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.
MicroSectors FANG+ ETN has accumulated $61.6 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 55,000 shares and has a Zacks ETF Rank #3.
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Meta Surges on Strong Q1 Earnings: ETFs to Buy
After the closing bell on Apr 26, Facebook’s parent company Meta Platforms (META - Free Report) reported solid first-quarter 2023 results, wherein it outpaced revenue and earnings estimates. The company issued upbeat revenue guidance amid the ongoing progress to bring down costs (read: Leveraged Tech ETFs to Cash in on Upbeat Big Tech Earnings).
META shares spiked as much as 11% to their highest level since January 2022 in aftermarket hours on elevated volume. Investors should buy ETFs having a large allocation to this social media giant to tap the opportune moment. These include 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) .
Earnings in Focus
Adjusted earnings per share came in at $2.20, topping the Zacks Consensus Estimate of $1.96 but declining from $2.72 the year-ago quarter. Revenues grew 3% year over year to $28.6 billion and came above the estimated $27.5 billion. This marks the first revenue increase in nearly a year driven by the strong growth in ad impressions, which rose 26% year over year in Meta's "Family of Apps" (Facebook, Instagram and WhatsApp).
Meta Platforms’ global daily active users increased 4% year over year to 2.04 billion. Monthly active users grew 2% year over year to 2.99 billion. The company stated that about 3.02 billion people used at least one of the Family of services (Facebook, WhatsApp, Instagram or Messenger) every day, on average in March.
The world’s largest social media platform expects to post revenues in the range of $29.5-$32 billion for the second quarter. The Zacks Consensus Estimate is pegged at $27.56 billion.
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 $10.8 billion in its asset base. It follows the Communication Services Select Sector Index and holds 24 stocks in its basket, with Meta Platforms occupying the top position at 22.2% share. About 47.5% of the portfolio is allocated to interactive media & services, while entertainment and media round off the next two (see: all the Communication ETFs here).
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 #2 (Buy).
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 111 stocks in its basket, with Meta Platforms occupying the top position at 15.5%.
Fidelity MSCI Communication Services Index ETF has amassed $579.1 million in its asset base and trades in an average daily volume of 97,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 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 115 stocks in its basket, Meta Platform takes the top spot with a 15.4% share. Interactive media & services is the top sector, accounting for 44.3% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $2.7 billion and trades in a good volume of 180,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 (Hold) 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 69 stocks in its basket, with Meta Platforms taking the top spot at 12.8% share. Interactive media & services dominates the fund’s return at 47.1%, followed by integrated telecommunication services (19.6%).
iShares Global Comm Services ETF has amassed $266.8 million in its asset base while trading at an average daily volume of 19,000 shares. The expense ratio comes in at 0.40%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: How to Invest in the Metaverse with ETFs).
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.
MicroSectors FANG+ ETN has accumulated $61.6 million in its asset base and charges 58 bps in annual fees. It trades in an average daily volume of 55,000 shares and has a Zacks ETF Rank #3.