Twitter (TWTR) closed the most recent trading day at $38.79, moving -1.02% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 2.01%. Elsewhere, the Dow lost 1.56%, while the tech-heavy Nasdaq lost 0.2%.
Heading into today, shares of the short messaging service had lost 2.44% over the past month, outpacing the Computer and Technology sector’s loss of 4.35% and the S&P 500’s loss of 6.08% in that time.
Investors will be hoping for strength from Twitter as it approaches its next earnings release. On that day, Twitter is projected to report earnings of $0.14 per share, which would represent a year-over-year decline of 30%. Our most recent consensus estimate is calling for quarterly revenue of $1.33 billion, up 12.04% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.66 per share and revenue of $5.89 billion. These totals would mark changes of +730% and +15.96%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Twitter. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Twitter is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Twitter is currently trading at a Forward P/E ratio of 23.68. This represents a discount compared to its industry’s average Forward P/E of 43.82.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 107, putting it in the top 43% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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