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Time to Sign Into Social Media ETF on Upbeat Q1 Earnings?
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The social media space is hot with Global X Social Media Index ETF (SOCL - Free Report) having returned about 1.9% in the past five days (as of May 5, 2020), beating the S&P 500 (up 0.2%). Decent-to-upbeat earnings reports from Twitter , Snap (SNAP - Free Report) , Spotify (SPOT - Free Report) , Alphabet (GOOGL - Free Report) and Facebook have boosted the space.
In the past month, SOCL has added 19.6% versus the S&P 500’s 14.2% gain. Notably, social distancing triggered by the coronavirus outbreak has benefited social media communication in the past month (read: Buy 5 Solid Tech ETFs At Least 10% Away From 52-Week High).
Inside Q1 Earnings
Twitter– In late-April,Twitterreported first-quarter 2020 non-GAAP earnings of 11 cents per share that beat the Zacks Consensus Estimate by 10%. However, the figure decreased 70.3% year over year. Revenues grew 2.6% year over year to $807.6 million, which beat the Zacks Consensus Estimate by 4.5%.
Average monetizable daily active users (mDAU) were 166 million in the reported quarter compared with 134 million in the year-ago quarter and 152 million in the previous quarter. Lists, which make it easier for people to create and share timelines about the things that matter to them, improved engagement.
Facebook– After the closing bell on Apr 29, Facebook came up with mixed first-quarter 2020 results wherein it beat estimates on revenues but missed on earnings. Shares of Facebook rose more than 10% in aftermarket hours on elevated volumes (read: Facebook Soars Post Q1 Earnings: ETFs in Focus).
Adjusted earnings per share came in at $1.71, below the Zacks Consensus Estimate of $1.73 but up 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% in 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 each month, and about 2.36 billion people use at least one of the Family of services every day on average.
Snap– The company reported first-quarter 2020 loss of 8 cents per share, wider than the Zacks Consensus Estimate by 14.3% but narrower than the year-ago quarter’s loss of 10 cents. Revenues surged 44% from the year-ago quarter to $462.5 million, beating the consensus mark by 9.1%. The revenue figure was within the guided range of $450-$470 million.
Average revenue per user (ARPU) increased 20.2% year over year. Snap witnessed more than 30% increase in communication among friends in the last week of March from the level seen in the last week of January with a more than 50% jump in some of the geographies that were hit hard by coronavirus. Shares benefited massively post earnings.
Alphabet– Google-parent Alphabet reported mixed first-quarter 2020 results on Apr 28, with earnings missing and revenues topping estimates. Earnings per share came in at $9.87, missing the Zacks Consensus Estimate of $10.97 and declining 35.7% sequentially and 17.1% year over year.
Net revenues, excluding total traffic acquisition cost or TAC (TAC is the portion of revenues shared with Google’s partners, and amount paid to distribution partners and others who direct traffic to the Google website), came in at $33.7 billion, down 11.5% sequentially but up 14.3% year over year (read: Google ETFs Gain Despite Mixed Earnings Amid Coronavirus Crisis).
Spotify – In late-April, the company reported a quarterly loss of 22 cents per share versus the Zacks Consensus Estimate of a loss of 42 cents. This compares to a loss of 90 cents per share a year ago. These figures are adjusted for non-recurring items. It posted revenues of $2.04 billion, surpassing the Zacks Consensus Estimate by 1.79%. This compares to year-ago revenues of $1.72 billion.
Market Impact
Investors should note that Facebook, Twitter, Snap, Alphabet and Spotify have solid exposure in the social media ETF SOCL. Below we provide some details of the fund.
SOCL in Focus
This fund is a pure play in the global social media space. Facebook takes the second spot with about 10.27% exposure while Twitter accounts for 6.79% of the portfolio. Snap takes about 7.48% of the fund while Spotify and Alphabet occupy about 5.58% and 4.78% of SOCL, respectively. The fund has about $115.9 million in assets and charges 65 bps in fees (see all technology ETFs here).
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Time to Sign Into Social Media ETF on Upbeat Q1 Earnings?
The social media space is hot with Global X Social Media Index ETF (SOCL - Free Report) having returned about 1.9% in the past five days (as of May 5, 2020), beating the S&P 500 (up 0.2%). Decent-to-upbeat earnings reports from Twitter , Snap (SNAP - Free Report) , Spotify (SPOT - Free Report) , Alphabet (GOOGL - Free Report) and Facebook have boosted the space.
In the past month, SOCL has added 19.6% versus the S&P 500’s 14.2% gain. Notably, social distancing triggered by the coronavirus outbreak has benefited social media communication in the past month (read: Buy 5 Solid Tech ETFs At Least 10% Away From 52-Week High).
Inside Q1 Earnings
Twitter– In late-April,Twitterreported first-quarter 2020 non-GAAP earnings of 11 cents per share that beat the Zacks Consensus Estimate by 10%. However, the figure decreased 70.3% year over year. Revenues grew 2.6% year over year to $807.6 million, which beat the Zacks Consensus Estimate by 4.5%.
Average monetizable daily active users (mDAU) were 166 million in the reported quarter compared with 134 million in the year-ago quarter and 152 million in the previous quarter. Lists, which make it easier for people to create and share timelines about the things that matter to them, improved engagement.
Facebook– After the closing bell on Apr 29, Facebook came up with mixed first-quarter 2020 results wherein it beat estimates on revenues but missed on earnings. Shares of Facebook rose more than 10% in aftermarket hours on elevated volumes (read: Facebook Soars Post Q1 Earnings: ETFs in Focus).
Adjusted earnings per share came in at $1.71, below the Zacks Consensus Estimate of $1.73 but up 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% in 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 each month, and about 2.36 billion people use at least one of the Family of services every day on average.
Snap– The company reported first-quarter 2020 loss of 8 cents per share, wider than the Zacks Consensus Estimate by 14.3% but narrower than the year-ago quarter’s loss of 10 cents. Revenues surged 44% from the year-ago quarter to $462.5 million, beating the consensus mark by 9.1%. The revenue figure was within the guided range of $450-$470 million.
Average revenue per user (ARPU) increased 20.2% year over year. Snap witnessed more than 30% increase in communication among friends in the last week of March from the level seen in the last week of January with a more than 50% jump in some of the geographies that were hit hard by coronavirus. Shares benefited massively post earnings.
Alphabet– Google-parent Alphabet reported mixed first-quarter 2020 results on Apr 28, with earnings missing and revenues topping estimates. Earnings per share came in at $9.87, missing the Zacks Consensus Estimate of $10.97 and declining 35.7% sequentially and 17.1% year over year.
Net revenues, excluding total traffic acquisition cost or TAC (TAC is the portion of revenues shared with Google’s partners, and amount paid to distribution partners and others who direct traffic to the Google website), came in at $33.7 billion, down 11.5% sequentially but up 14.3% year over year (read: Google ETFs Gain Despite Mixed Earnings Amid Coronavirus Crisis).
Spotify – In late-April, the company reported a quarterly loss of 22 cents per share versus the Zacks Consensus Estimate of a loss of 42 cents. This compares to a loss of 90 cents per share a year ago. These figures are adjusted for non-recurring items. It posted revenues of $2.04 billion, surpassing the Zacks Consensus Estimate by 1.79%. This compares to year-ago revenues of $1.72 billion.
Market Impact
Investors should note that Facebook, Twitter, Snap, Alphabet and Spotify have solid exposure in the social media ETF SOCL. Below we provide some details of the fund.
SOCL in Focus
This fund is a pure play in the global social media space. Facebook takes the second spot with about 10.27% exposure while Twitter accounts for 6.79% of the portfolio. Snap takes about 7.48% of the fund while Spotify and Alphabet occupy about 5.58% and 4.78% of SOCL, respectively. The fund has about $115.9 million in assets and charges 65 bps in fees (see all technology ETFs here).
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 >>