Snap Slumps on Weak Q2: Time to Stay Away from These ETFs?
Snap SNAP reported a loss of 2 cents per share for second-quarter 2022. The Zacks Consensus Estimate for loss was pegged at 18 cents per share. The company had reported earnings of 10 cents per share in the year-ago quarter. Revenues increased 13.1% from the year-ago quarter’s levels to $1.11 billion but missed the Zacks Consensus Estimate by 2.5%. Shares slumped more than 30% on Jul 22.
The company stated that some advertisers continue to face supply-chain disruptions and labor shortages, and many others are contending with rising costs amid record inflation, which led to cutbacks in spending on advertising.
In May, Snap said it wouldn’t meet the second-quarter guidance it set the prior month, which resulted in a 43% plunge in the share price. Snap announced plans to “substantially reduce” hiring and refurbish its strategy as it posted bleak second-quarter results.
Social media platforms — as well as other tech stocks — witnessed unparallel growth over the past two years as users spent more time and money online during coronavirus pandemic lockdowns. Snap now attributed its disappointing results to slowing demand for its online advertising platform.
Snap said it wants to drive greater productivity by reducing its rate of hiring and through a “strict reprioritization of goals and initiatives across the company”. “The second quarter of 2022 proved more challenging than we expected,” Snap said in the investor letter.
Snap currently carries a Zacks Rank #4 (Sell). Snap stock has a, extremely downbeat Value Score of “F” and a Momentum score of “D.” No wonder, ETFs that are heavy on Snap shares may be avoided in the current scenario.
ETFs in Focus
Roundhill Ball Metaverse ETF METV – Snap has about 4.86% Weight
The underlying Ball Metaverse Index seeks to track the performance of globally-listed equity securities of companies that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. The fund charges 59 bps in fees.
ProShares On-Demand ETF OND – Snap has about 4.60% Weight
The underlying FactSet On-Demand Index consists of companies which provide on-demand platforms and services to consumers. The fund charges 58 bps in fees.
Global X Social Media ETF SOCL – Snap has about 4.17% Weight
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. The fund charges 65 bps in fees.
Global X Metaverse ETF VR – Snap has about 3.88% Weight
The underlying Global X Metaverse Index provides exposure to companies that are positioned to benefit from the development and commercialization of the metaverse. The fund charges 50 bps in fees.
ProShares Metaverse ETF VERS – Snap has about 3.88% Weight
The underlying Solactive Metaverse Theme Index consists of companies that provide innovative technologies to offer products and services around the Metaverse. The fund charges 58 bps in fees.
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Global X Metaverse ETF (VR): ETF Research Reports
Global X Social Media ETF (SOCL): ETF Research Reports
Snap Inc. (SNAP) : Free Stock Analysis Report
ProShares OnDemand ETF (OND): ETF Research Reports
Roundhill Ball Metaverse ETF (METV): ETF Research Reports
ProShares Metaverse ETF (VERS): ETF Research Reports
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