Meta Q4 Earnings Preview: Should ETF Investors Buy Now?

Social media giant Meta Platforms META is set to release fourth-quarter fiscal 2024 results today, after market close. META stock has delivered returns of 14% over the past three months and has outperformed the industry’s growth of 7.1%. The solid trend is likely to continue given that Meta Platforms has a reasonable chance of beating earnings estimates and has also seen positive earnings estimate revision for the to-be-reported quarter, which is generally a precursor to an earnings beat (read: (read: Mag 7 ETFs to Watch This Earnings Season). Image Source: Zacks Investment ResearchThis has put the focus on ETFs — iShares Global Comm Services ETF IXP, Fidelity MSCI Communication Services Index ETF FCOM, Vanguard Communication Services ETF VOX, Communication Services Select Sector SPDR Fund XLC and First Trust Dow Jones Internet Index Fund FDN — that have a substantial allocation to this social media giant.Earnings WhispersMeta Platforms has an Earnings ESP of +6.74% and a Zacks Rank #3 (Hold). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 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. The social media giant saw a solid earnings estimate revision of 15 cents for the fourth quarter over the past seven days. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate for the yet-to-be-reported quarter indicates substantial year-over-year earnings growth of 29.5%. Revenues are expected to increase 17.1% year over year. Meta Platforms delivered an earnings surprise of 11.34%, on average, in the last four quarters (see: all the Communication ETFs here).Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Meta Platforms, Inc. Price, Consensus and EPS Surprise Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. QuoteMeta currently has a Wall Street analyst recommendation of 1.38 on a scale of 1 to 5 (Strong Buy to Strong Sell), made by 53 brokerage firms. Of these, 44 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 83.02% and 3.77% of all recommendations. Based on short-term price targets offered by 51 analysts, the average price target for Meta Platforms comes to $676.65, ranging from a low of $475.00 to a high of $811.00.META has a solid Growth and Momentum Score of A each. At current levels, Meta's stock trades at 25.62X forward earnings, a discount to the Zacks Internet-Software industry average of 31.20X. What to WatchMeta received a price target boost from a couple of analysts ahead of its earnings release. Wedbush raised the price target for the stock from $680 to $700 and BofA Global Securities lifted the price target to $710 from $660 (read: DeepSeek Shakes US Tech Dominance: Impact on Stocks & ETFs).The world’s largest social media platform expects to post revenues in the range of $45-$48 billion for the fourth quarter. However, Meta expects a “significant acceleration” in infrastructure spending this year as it continues to pour money into developing AI. Chief executive Mark Zuckerberg pledged to spend significantly on infrastructure and other projects like the metaverse and AI-powered glasses. Meta plans to invest around $60 to $65 billion in AI in 2025, up from $40 billion spent in 2024. Management also plans to launch its own GPUs by the end of the year.ETFs in FocusiShares 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 66 stocks in its basket, with Meta Platforms taking the top spot at 23.4% share. iShares Global Comm Services ETF has amassed $409.4 million in its asset base while trading at an average daily volume of 15,000 shares. The expense ratio is 0.41%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook.Fidelity MSCI Communication Services Index ETF (FCOM) Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 109 stocks in its basket, with Meta Platforms occupying the top position at 22.6%. Fidelity MSCI Communication Services Index ETF has amassed $1.4 billion in its asset base and trades in an average daily volume of 136,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: Disney's Moana 2 Smashes Box Office on Debut: ETFs to Tap).Vanguard Communication Services ETF (VOX)Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 117 stocks in its basket, Meta Platform takes the top spot with a 22% share. Vanguard Communication Services ETF has AUM of $4.7 billion and trades in a good volume of 132,000 shares a day, on average. It charges 10 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.Communication Services Select Sector SPDR Fund (XLC) Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services and has accumulated $21.2 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 20.1% share. Communication Services Select Sector SPDR Fund charges 9 bps in annual fees and trades in an average daily volume of 4 million shares. It has a Zacks ETF Rank #1.First Trust Dow Jones Internet Index Fund (FDN)First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 40 stocks in its basket, with Meta Platform occupying the top spot at 10.5%. First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $7.2 billion and an average daily volume of around 345,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 with a High risk outlook.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 >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Dow Jones Internet ETF (FDN): ETF Research Reports Vanguard Communication Services ETF (VOX): ETF Research Reports Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports iShares Global Comm Services ETF (IXP): ETF Research Reports Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports Meta Platforms, Inc. 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