Twitter (TWTR) earnings preview: focus on user and profitability growth

4:27 am ET, 25 Jul 2018

Twitter, Inc. (TWTR) is expected to report earnings on July 27 before market open.  The report will be for the fiscal quarter ending June 2018. Shares are trading at 43.31, down -0.25%.

What are TWTR earnings expectations?  What news should investors be aware of?  

Twitter rang in its second straight profitable quarter while surpassing analysts' expectations for the top and bottom line.  The growth in daily active users comfortably outpaced monthly active user growth. In addition, improvement in engagement resulted in attracting more ad dollars. 

While there is uncertainty in data access and possibly in ad revenue in the wake of the General Data Protection Regulation, or GDPR, most analysts believe Twitter will remain profitable throughout 2018 and beyond, as the firm continues to attract more video ad dollars. 

Twitter has captured the attention of nearly 320 million users, including many prominent celebrities and public figures worldwide, and the company’s access to, and interactions around, real-time information and content create more value for its users and for advertisers. However, Twitter’s slowdown in user growth remains a concern, and as the firm continues to invest in product enhancements and live video content, lack of a turnaround in user growth has made user monetization an increasingly difficult task.

Twitter, Inc. has a history of beating analysts’ earnings estimates. In the past four quarters, the company: 

  • Beat analyst EPS estimates by 3 cents ($.08 actuals vs. $.05 forecast) in FQ2’17;
  • Beat analyst EPS estimates by 4 cents ($.10 actuals vs. $.06 forecast) in FQ3’17;
  • Beat analyst EPS estimates by 5 cents ($.19 actuals vs. $.14 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 4 cents ($.16 actuals vs. $.12 forecast) in FQ1’18.

For FQ2’18, EPS is expected to grow by 113% year-over-year to $.17, while revenue is expected to grow 22% year-over-year to $700 million.  

Over the last month, Twitter, Inc. (TWTR) returned -5.6%.

Twitter, Inc. (TWTR) forward P/E ratio is 51.38, and it’s high compared to its industry peers’ P/E ratios.

Twitter, Inc. (TWTR) short share of float is 5.75%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

Twitter, Inc. (TWTR) average analyst price target ($30.57) is -29.42% below its current price ($43.31).

For the latest price and information on Twitter, Inc., please visit Finstead and search for "TWTR price" or "TWTR news".

Twitter (TWTR): key risks to be aware of

5:20 pm ET, 04 Jun 2018

Twitter is joining S&P 500, replacing Monsanto, and investors are very excited about this.  The stock is up 3% after hours. 

Now that stock price is peaking, traders are wondering what's next--what is the TWTR stock price prediction, and what are the key risks to be aware of?   

The uncertainty of Twitter's stock price is very high, given questions surrounding the company’s ability to expand and monetize its user base.  Twitter has the potential to expand its user base and attract more ad dollars, but the company has not yet demonstrated this ability consistently.  The lack of user growth is also concerning. 

A downturn in online ad spending would force Twitter to burn cash, resulting in a much lower valuation.

With no user growth, premium content providers, in addition to advertisers, could abandon or allocate much less content and ad dollars to be distributed via and spent on Twitter. Twitter must maintain the number of accounts belonging to celebrities, politicians, athletes, and other public figures in order to bring in more users and increase engagement.

Twitter also faces the risk of losing devoted Twitter users that use various third-party Twitter apps developed via Twitter API, if it attempted to monetize those users too aggressively. In fact, even though the company purchased one of those apps, TweetDeck, it has not yet inserted ads to accompany the users’ tweets. The company can get a piece of banner ads that some other Twitter third-party apps place, but it has not yet done so. 

In the social media space, there is a delicate balance between a better user experience and monetization in order to maintain users and generate revenue. Because it is cautious about losing users, Twitter has not yet attempted to do so with third-party Twitter apps.

Over the last year, TWTR returned +106.88%.  This return is higher than Internet Information Providers sector (38.48%), Technology industry (33.47%), S&P 500 (12.62%) returns.

Facebook (FB) earnings expectations: 5 things to watch

10:19 am ET, 25 Apr 2018

Facebook (NASDAQ: FB) stock slightly dipped in today’s trading. The social networking company is disclosing its earnings results after the close bell today.

In 2017, the stock appreciated 47%. But in 2018, it is down 12%.

Investors are wondering what to expect from Facebook earnings. 

The consensus analyst profit expectation is $1.36 per share on revenue of $11.4 billion for the quarter.

Facebook's main source of revenue is advertising. Its CEO Mark Zuckerberg said that he doesn't see any significant impact on the company's business stemming from the Cambridge Analytica issue.

But according to analysts, the top position that the social networking company has attained through so many years may be threatened. User trust is broken because of the data leakage issue, instigating uncertainty around user engagement and growth.

The legislative control of social networks is evolving fast. Legislations were introduced by 2 US senators to curb Facebook data collection, storing, usage and sharing. 

On May 25, EU's General Data Protection Regulation (GDPR) will come into effect. GDPR will let users control the way their personal information is stored and used. The firms that breach the rules will have to pay huge fines.

Ad prices are likely to surge because people spend less time on Facebook than before, leading to a reduction in ad impressions. The number of users in the US and Canada has declined in the previous quarter. 

For today’s earnings, the five key questions to watch out for are:

  • Is the number of users stable, or declining in developed markets such as the US and Canada? 
  • Are users spending less time on Facebook?
  • Are advertisers spending more or less money with Facebook?
  • Are there any indications of how the regulation may hit the bottom line?
  • Are the costs increasing?

What is the stock forecast for Facebook? Per Finstead Research, Facebook shares have an average price target of almost $224. It has an upside of about 40%.

The company has a fairly high valuation compared to its peers. Its P/E ratio is behind that of Google (GOOGL), Sina Corporation (SINA) and Twitter (TWTR).


For the latest news data on Facebook, please visit Finstead and type “FB news”, “FB stock price” or “FB price target”.  

Twitter (TWTR): How Will The Stock Price Move?

5:53 pm ET, 20 Mar 2018

Facebook's (NASDAQ: FB) privacy issues have led to Twitter's (NYSE: TWTR) slump of over 10% today. This is because Twitter, as a social media company, derives revenue from ads, just like Facebook.

Its investors are obviously bothered by issues related to data security, corporate responsibility, as well as regulatory pressure. 

Investors perceive a change in the status quo of the social media companies.  Radical changes in the business models of Twitter, as well as Facebook, will become a necessity once users start deserting those social media empires (perhaps as a result of feeling frustrated about data breaches, such as the one that came from Cambridge Analytica).

The drop in Twitter's stock price is also attributed to the request made by the Israeli government for the removal of contents that spurred violence against the state

The Israeli government is even considering a legal action against Twitter, because of it failed to respond to the government's request. 

According to Finstead, Twitter has a negative price upside -21.73% (visit Finstead and type "TWTR upside").  Per Finstead research, the average price target is around $27.  

What are the prospects of the stock price rising? 

Twitter’s valuation ratio is relatively high compared to its peers (e.g., Zillow or JD).

If you’re a trader, there will be a point at which the stock will bounce back.  If you’re an investor, use your caution. 

Facebook (FB): Should You Buy The Stock Now?

6:31 am ET, 20 Mar 2018

The data incongruity issue has created a pressure on Facebook’s stock performance, which is down 6.79% in yesterday’s trading.  

Facebook is under huge pressure for letting the data company Cambridge Analytica acquire 50 million user profiles in the U.S., which the firm might have used to help Donald Trump in his election campaign.

The sell-off was instigated by a stipulation that Facebook allowed Cambridge Analytica to violate its terms of service since the firm used the data acquired by user submissions for commercial purposes.

From our perspective, the market might have over-reacted, since this problem was detected early and it was well taken care of by Facebook’s management.  

Facebook knew about the violation and blocked the controversial Cambridge Analytics application in 2015. The internet giant also ensured that all data acquired illegally was permanently destroyed.  

It is questionable whether all of the data was actually erased.

So we think this may be a buying opportunity for long-term Facebook investors.Based on Finstead research, Facebook’s stock price upside is 30%.

It is clear that the Facebook leadership team is trying to do the right thing to ensure consumer confidence.  

How high can the stock price go? According to Finstead, the average price target is almost $223.


Even though Facebook’s valuation is fairly high compared to its peers (its P/E ratio lags only that of GOOGL, SINA and TWTR), we see a potential for stock price appreciation because of the company’s high revenue growth (visit Finstead and type “FB growth” to get a sense of how high it is).  

Do you think Facebook will bounce back?

Twitter's Hate Purge: Why Is The Stock Moving Up?

5:54 pm ET, 18 Dec 2017

Twitter

Today we saw the impact of Twitter's (NYSE: TWTR) new rules for hate groups/speech on its stock price.  The stock rallied more than 11% by market close.  

Why did the stock move up?  Our hypothesis is that removing profiles that include hateful imagery and names is likely to appeal to advertisers.  

More than 2/3 of Twitter's revenue is driven by US and international advertising (roughly 50-50 mix).  

Below are key drivers of Twitter's value that present opportunities for Twitter's stock upside:

  • U.S. Ad Revenue Per 1,000 Timeline Views: While we had originally thought this metric would decline at least 10% in 2017 from $21 in 2016, there could be an upside now, given the new 'speech rules' Twitter just announced.  We think the Company will now be more likely to attract advertising spend from US advertisers. 
  • International Ad Revenue Per 1,000 Timeline Views: This metric was $3.45 in 2016. The hate speech purge will impact international revenue to a lesser extent.  Our initial projection is that this number will grow at least 15% year over year, as the Company ramps up its presence and sales efforts outside the US.  

Reputable Twitter investors have called on the Company to clean up its platform.  At one point, Chris Sacca said the proliferation of bots on the Twitter platform was "embarrassing", and so his firm sold the TWTR stock.

Over the last year, TWTR returned +32.53%. This return is higher than Technology sector (27.74%) and S&P 500 (19.14%) returns, but lower than Internet Information Providers industry (42.27%) return.

Based on Finstead Research, TWTR average analyst price target is $18.33 (visit Finbot and type "TWTR price target").

Twitter, Inc. (TWTR) Stock Guide

Updated at: 6:09 pm ET, 18 Sep 2020

Before we start: if you're looking for TWTR stock price, you can quickly find it out by visiting Finny and typing "TWTR quote". If you're looking for a quick scoop on TWTR stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "TWTR". You'll get all this info in one place. Or you can just type "TWTR news" to get the latest stock news.

Looking to buy or sell Twitter, Inc. (TWTR)? Interested in getting the full scoop on TWTR, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this TWTR stock guide, we'll address key questions about TWTR, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are TWTR earnings?
2. What is TWTR stock forecast (i.e., prediction)?
3. TWTR buy or sell? What is TWTR Finny Score?
4. What are the reasons to buy TWTR? Why should I buy TWTR stock?
5. What are the reasons to sell TWTR? Why should I sell TWTR stock?
6. What are TWTR key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are TWTR earnings?

TWTR trailing 12-month earnings per share (EPS) is -$1.58.

Analyst Predictions

2. What is TWTR stock forecast (i.e., prediction)?

Based on TWTR analyst price targets, TWTR stock forecast is $37.04 (for a year from now). That means the average analyst price target for TWTR stock is $37.04. The prediction is based on 36 analyst estimates.

The low price target for TWTR is $19.00, while the high price target is $52.00.

TWTR analyst rating is Hold.

Analysis

3. TWTR buy or sell? What is TWTR Finny Score?

#{finnyScore:57}Our quantitative analysis shows 4 reasons to buy and 3 reasons to sell TWTR, resulting in Finny Score of 57.

4. What are the reasons to buy TWTR? Why should I buy TWTR stock?

Here are the reasons to buy TWTR stock:

  • Twitter’s platform is attractive because of its openness, real-time content, conversational format and distribution ability. The platform’s greatest strength is its simplicity. The company increased character limits for tweets to 280 from 140 to let users express more in a tweet.
  • Under Jack Dorsey, the company is focusing on boosting user engagement levels and enhancing the product. The video content opportunity for Twitter could help the company grow at a double-digit rate again. Also, Twitter's revenue per user is high relative to other social networks and apps.
  • Twitter’s growth can partly be attributed to its successful acquisitions. To-date, the company has acquired over 50 companies that not only expanded its technology but also improved its software developer talent base.
  • Twitter prohibited all forms of political advertising on its platform--a move that some view will help the company in the long run (as opposed to maximizing short-term profit).
  • The company made a deal with the NFL to live-stream Thursday night games, so users can use Twitter to not only talk about games, but also watch them. This opportunity may prove to be significant--as other premium content providers could use Twitter in similar ways.
  • TWTR profitability is improving. The YoY profit margin change was 13.64 percentage points. See TWTR profitability chart.
  • TWTR Price/Book ratio is 4.24, which is low compared to its industry peers’ P/B ratios. See TWTR forward Price/Book ratio chart.
  • TWTR PEG ratio (P/E adjusted for growth) is 1.31, which is low compared to its industry peers’ PEG ratios. See TWTR PEG chart.
  • TWTR cash to debt ratio is 1.88, higher than the average industry (0.17) and sector (0.17) cash to debt ratio. See TWTR cash to debt chart.

5. What are the reasons to sell TWTR? Why should I sell TWTR stock?

Let's look at the reasons to sell TWTR stock (i.e., the bear case):

  • The company relies on advertising for its revenue. Any downturn in the overall online ad space will have a significant impact on Twitter.
  • Increasing competition from Facebook, Snapchat, Weibo, and Pinterest pose a threat to Twitter. Facebook in particular is the competitor that Twitter fears the most, since it's constantly innovating. Also, Snapchat and Weibo are successful at attracting younger users and pose significant competition to Twitter, despite their relatively small size.
  • Twitter’s user growth is decelerating, so advertisers may allocate less of their budget toward ad placements on Twitter. Also, the company's continuing investments in product development, international expansion and sales & marketing will continue to negatively impact Twitter’s profitability in the near term.
  • TWTR quarterly revenue growth was -18.80%, lower than the industry and sector average revenue growth (1.28% and 0.89%, respectively). See TWTR revenue growth chart.
  • TWTR average analyst price target ($37.04) is below its current price ($40.15). See TWTR price target chart.
  • TWTR short share of float is 4.88%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See TWTR short share of float chart.

Key Stats

6. What are TWTR key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for TWTR:

Metrics TWTR
Price $43.84
Average Price Target / Upside $37.04 / -15.52%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Internet Content & Information
Sector Technology
Number of Employees 3,920
Market Cap $32.55B
Forward P/E Ratio 56.37
Price/Book Ratio 9.8
Revenue (TTM) $3.32B
YoY Quarterly Revenue Growth -18.80%
Profit Margin -37.06%

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