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Social media giant Meta Platforms (META - Free Report) is set to release first-quarter fiscal 2024 results on Apr 24 after market close.
The stock has jumped 22% over the past three months and has outperformed the industry’s decline of 7.8%. The outperformance might continue as Meta Platforms has a strong chance of beating estimates on earnings and saw a positive earnings revision activity, which is generally a precursor to an earnings beat (read: S&P 500 Soars to New Highs: 5 Best Stocks YTD).
This has put the 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 Global X Social Media Index ETF (SOCL - Free Report) — with a substantial allocation to this social media giant.
Earnings Whispers
Meta Platforms has an Earnings ESP of +0.62% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) 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.
Meta Platforms saw a positive earnings estimate revision of 5 cents over the past 30 days for the soon-to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The current Zacks Consensus Estimate for the yet-to-be-reported quarter indicates substantial year-over-year earnings growth of 63.6%. Revenues are expected to increase 26.6%. Meta Platforms delivered an earnings surprise of 19.71%, on average, in the last four quarters.
The stock belongs to a top-ranked Zacks Industry (top 22%) and has a VGM Score of B.
Meta Platforms currently has an average brokerage recommendation (ABR) of 1.28 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 46 brokerage firms. The current ABR compares to an ABR of 1.29 a month ago based on 45 recommendations.
Of the 46 recommendations deriving the current ABR, 40 are Strong Buy and one is Buy. Strong Buy and Buy, respectively, account for 86.96% and 2.17% of all recommendations. A month ago, Strong Buy made up 86.67%, while Buy represented 2.22%.
Based on short-term price targets offered by 40 analysts, the average price target for Meta Platforms comes to $523.35. The forecasts range from a low of $285.00 to a high of $610.00.
Projections
On the last earnings conference call, the world’s largest social media platform guided revenues in the range of $34.5-$37 billion for the first quarter.
ETFs to Watch
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 $17.5 billion in its asset base. It follows the Communication Services Select Sector Index and holds 22 stocks in its basket, with Meta Platforms occupying the top position at 23% share. About 48.7% 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 9 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #1.
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 110 stocks in its basket, with Meta Platforms occupying the top position at 27.8%.
Fidelity MSCI Communication Services Index ETF has amassed $1 billion in its asset base and trades in an average daily volume of 106,000 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 116 stocks in its basket, Meta Platform takes the top spot with a 22.4% share. Interactive media & services is the top sector, accounting for 51% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $4 billion and trades in a good volume of 148,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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 65 stocks in its basket, with Meta Platforms taking the top spot at 21.4% share. Interactive media & services dominates the fund’s return at 54.8%, followed by integrated telecommunication services (16.4%).
iShares Global Comm Services ETF has amassed $268.3 million in its asset base while trading at an average daily volume of 12,000 shares. The expense ratio is 0.42%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: Make Your ETF Portfolio AI-Rich in Buffett-Like Manner).
Global X Social Media Index ETF provides investors access to social media companies around the world and has amassed $139.9 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 45 securities in the basket. Meta Platforms occupies the second position with 10.3% of the assets.
Global X Social Media Index ETF charges 0.65% in annual fees and sees lower trading volumes of roughly 10,000 shares a day. The fund has a Zacks ETF Rank #3 with a High risk outlook.
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Meta Platforms ETFs to Buy Ahead of Q1 Earnings
Social media giant Meta Platforms (META - Free Report) is set to release first-quarter fiscal 2024 results on Apr 24 after market close.
The stock has jumped 22% over the past three months and has outperformed the industry’s decline of 7.8%. The outperformance might continue as Meta Platforms has a strong chance of beating estimates on earnings and saw a positive earnings revision activity, which is generally a precursor to an earnings beat (read: S&P 500 Soars to New Highs: 5 Best Stocks YTD).
This has put the 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 Global X Social Media Index ETF (SOCL - Free Report) — with a substantial allocation to this social media giant.
Earnings Whispers
Meta Platforms has an Earnings ESP of +0.62% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) 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.
Meta Platforms saw a positive earnings estimate revision of 5 cents over the past 30 days for the soon-to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The current Zacks Consensus Estimate for the yet-to-be-reported quarter indicates substantial year-over-year earnings growth of 63.6%. Revenues are expected to increase 26.6%. Meta Platforms delivered an earnings surprise of 19.71%, on average, in the last four quarters.
The stock belongs to a top-ranked Zacks Industry (top 22%) and has a VGM Score of B.
Meta Platforms currently has an average brokerage recommendation (ABR) of 1.28 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 46 brokerage firms. The current ABR compares to an ABR of 1.29 a month ago based on 45 recommendations.
Of the 46 recommendations deriving the current ABR, 40 are Strong Buy and one is Buy. Strong Buy and Buy, respectively, account for 86.96% and 2.17% of all recommendations. A month ago, Strong Buy made up 86.67%, while Buy represented 2.22%.
Based on short-term price targets offered by 40 analysts, the average price target for Meta Platforms comes to $523.35. The forecasts range from a low of $285.00 to a high of $610.00.
Projections
On the last earnings conference call, the world’s largest social media platform guided revenues in the range of $34.5-$37 billion for the first quarter.
ETFs to Watch
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 $17.5 billion in its asset base. It follows the Communication Services Select Sector Index and holds 22 stocks in its basket, with Meta Platforms occupying the top position at 23% share. About 48.7% 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 9 bps in annual fees and trades in an average daily volume of 6 million shares. It has a Zacks ETF Rank #1.
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 110 stocks in its basket, with Meta Platforms occupying the top position at 27.8%.
Fidelity MSCI Communication Services Index ETF has amassed $1 billion in its asset base and trades in an average daily volume of 106,000 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 116 stocks in its basket, Meta Platform takes the top spot with a 22.4% share. Interactive media & services is the top sector, accounting for 51% of the portfolio, while movies & entertainment, cable & satellite, and integrated telecommunication services round off the next three.
Vanguard Communication Services ETF has AUM of $4 billion and trades in a good volume of 148,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #2 with a Medium risk outlook.
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 65 stocks in its basket, with Meta Platforms taking the top spot at 21.4% share. Interactive media & services dominates the fund’s return at 54.8%, followed by integrated telecommunication services (16.4%).
iShares Global Comm Services ETF has amassed $268.3 million in its asset base while trading at an average daily volume of 12,000 shares. The expense ratio is 0.42%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (read: Make Your ETF Portfolio AI-Rich in Buffett-Like Manner).
Global X Social Media Index ETF (SOCL - Free Report)
Global X Social Media Index ETF provides investors access to social media companies around the world and has amassed $139.9 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 45 securities in the basket. Meta Platforms occupies the second position with 10.3% of the assets.
Global X Social Media Index ETF charges 0.65% in annual fees and sees lower trading volumes of roughly 10,000 shares a day. The fund has a Zacks ETF Rank #3 with a High risk outlook.