Yahoo Finance Should You Buy Social Media ETF (SOCL) Now?
Global X Social Media ETF SOCL has added 1.3% in the past week. While a huge crash in Facebook-parent Meta META stock (down 15.4%) has weighed on the fund (because Meta has about 13.7% weight in SOCL) past week, strength in other constituents – Snap SNAP, Spotify Technology S.A. SPOT and Pinterest Inc. PINS – should drive the fund in the near term.
Spotify Surpasses Q1 Earnings and Revenue Estimates
On Apr 23, 2024, the streaming giant Spotify came out with quarterly adjusted earnings of $1.05 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to loss of $1.24 per share a year ago. Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Spotify recorded revenues of $3.95 billion for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 2.05%. This compares to year-ago revenues of $3.26 billion. The company has topped consensus revenue estimates two times over the last four quarters. Spotify’s MAUs rose 19% year over year and 2% compared with the prior quarter.
Prudent cost management helped the company beating on earnings. Spotify went into cost-cutting mode last year, laying off more than a quarter of its headcount, according to industry tracker Layoffs.fyi. The company also reported a record quarterly profit and strong margin improvements.
Spotify has about 7.00% weight in SOCL.
Snap Surges Post Q1 Earnings Beat & Upbeat Guidance
Snapchat ownerSnap shares surged as much as 25% in after-hours on Apr 25, 2024 as the company reported upbeat first-quarter results that topped analysts' estimates for earnings and revenues. Snap’s earnings, adjusted for one-time gains and costs, were 3 cents per share in the quarter, which beat Zacks Consensus Estimate of a loss of 5 cents per share. SNAP surged 33% past week.
Revenues for Snap's first quarter increased 21% to $1.19 billion, which also surpassed the Zacks Consensus Estimate of $1.12 billion. Snap said its revenue growth was primarily driven by improvements in the company's advertising platform.
For its second quarter, Snap expects to report revenue between $1.23 billion and $1.26 billion, up from the $1.22 billion expected by analysts, according to StreetAccount, as quoted on CNBC. Snap said adjusted EBITDA will fall between $15 million and $45 million, compared to Wall Street’s expectations of $15.5 million.
Snap has about 5% weight in SOCL.
Pinterest Soars Post Earnings Release
Pinterest shares gained 18% in after hours on Apr 30, 2024. The digital advertising company have started growing again after a challenging 2022, when brands tightened their belts due to soaring inflation. The stock is up 1.9% past week.
Pinterest came out with quarterly adjusted earnings of $0.20 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.08 per share a year ago.
Pinterest posted revenues of $739.98 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 5.72%. This compares to year-ago revenues of $602.58 million. The company has topped consensus revenue estimates three times over the last four quarters.
Pinterest reported 518 global monthly active users (MAUs) for the first quarter, up 12% year over year. Wall Street was expecting MAUs 504.9 million. The company’s average revenue per user was $1.46 for the period, while the analysts’ expectation was $1.40 per user, as quoted on CNBC.
Pinterest has about 8.62% weight in SOCL.
SOCL in Focus
The underlying Solactive Social Media Index is designed to reflect the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications. Meta (13.69% weight), Pinterest (8.62%), Spotify (7.0%) and Snap (5.1%) hold the top four spots in the fund. The fund charges 65 bps in fees.
Investors should note that although Meta’s recent weakness has acted as a drag on the fund, many investors can employ the "buy-the-dip" strategy, which can bolster SOCL’s top holding Meta. Additionally, the three other stocks mentioned above are poised to support the fund’s performance in the near term.
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Global X Social Media ETF (SOCL): ETF Research Reports
Snap Inc. (SNAP) : Free Stock Analysis Report
Spotify Technology (SPOT) : Free Stock Analysis Report
Pinterest, Inc. (PINS) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
