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Twitter Q3 earnings preview

Date of earnings release

26/10/17 after-market

 

The story

Anybody buying Twitter shares is buying into a ‘turnaround story’. Expectations that one can happen are low. There is a potential double bottom around $14 but management need to offer reasons for optimism. The result of its trial of more characters in a tweet could be one source of optimism, but anecdotally it went down badly with its core user base. Perhaps more encouraging is video livestreaming. Twitter is best at breaking news, which live video can complement very well. Video is good for advertising and can entice a younger audience. There is still a shortage of evidence that Twitter can rekindle falling user growth and monetise existing users.

 

Price chart

Price performance

5yr + -60.3%

YTD +9.6%

Since last earnings +2.9%

 

Earnings

Q3 EPS expectation: 0.064 (Adjusted), -0.105 (GAAP)

Q3 Revenue expectation: 587.483 million

 

Chart of Revenue history and expectations

Source: Bloomberg, 23/10/17

 

Chart of Net Income history and expectations


Source: Bloomberg, 23/10/17


Valuation

Forward 12M P/E ratio: 56.7

 


 The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. Losses can exceed deposits.