For today’s bulletin, we take a look at the latest earning report from Twitter $TWTR and provide a link to download a FREE STOCK REPORT on the company
VALUATION WARNING: Overvalued stocks now make up 65.55% of our stocks assigned a valuation and 29.24% of those equities are calculated to be overvalued by 20% or more. Fifteen sectors are calculated to be overvalued.
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Twitter (TWTR) is a public, real-time, global platform where any user can create a Tweet and any user can follow other users. The platform is unique in its simplicity: Tweets are limited to 140 characters of text. This constraint makes it easy for anyone to quickly create, distribute and discover content that is consistent across our platform and optimized for mobile devices. As a result, Tweets drive a high velocity of information exchange that makes Twitter uniquely live.
Twitter reported results today and they show that revenue continues to decline–as has been the trend for many quarters now. However, investors were heartened by the fact that the decline was not as bad as expected and shares got a nice pop of @10% so far.
Earnings per share (EPS) were $0.11/share when expectations were that the company would barely post a positive EPS of $0.01/share. Revenues came in at $548 million vs the expected $512 million. And, the company saw a higher level of active users than expected–they reported 328 million active users vs the expected 321 million. Active users also increased on a quarterly basis by @nine million users.
Twitter has been making a bunch of changes lately to how it handles user time lines, tweets and replies, harassment, etc. The company CEO Jack Dorsey attributed the more positive than expected news to these changes., However, we suspect that if one would poll the most active users, they would claim the opposite, than many of changes–with the notable exception of the anti-harassment features–have actually made Twitter less functional.
Looking ahead, the company projections for Q2 are poor and well below analyst expectations. The lowered expectations are a surprise to some, because there is a now a well-known–albeit controversial–tweeter residing at 1600 Pennsylvania Avenue in Washington, DC and the Mar-A-Lago resort in Florida. It remains tough to say if their is a “Trump effect” for the company and if this effect is a positive or a negative for the social media company.
Our models have never been enamored with this company. As you can see from our long-term chart below, we have had a SELL or STRONG SELL on the stock since the IPO. This was certainly no Amazon or Google. We remain skeptical as to how this company can really make money since it seems to lose relevance when younger users flock to snapchat and other more “hip” sites.
Below is today’s data on Twitter (TWTR):
VALUENGINE RECOMMENDATION: ValuEngine continues its SELL recommendation on Twitter for 2017-04-25. Based on the information we have gathered and our resulting research, we feel that Twitter has the probability to UNDERPERFORM average market performance for the next year. The company exhibits UNATTRACTIVE Sharpe Ratio and Momentum.
You can download a free copy of detailed report on Twitter (TWTR) from the link below.
|Valuation & Rankings|
|Valuation||48.12% undervalued||Valuation Rank(?)||94|
|1-M Forecast Return||-0.38%||1-M Forecast Return Rank||23|
|12-M Return||-14.22%||Momentum Rank(?)||21|
|Sharpe Ratio||-0.58||Sharpe Ratio Rank(?)||15|
|5-Y Avg Annual Return||-30.68%||5-Y Avg Annual Rtn Rank||18|
|Expected EPS Growth||51.25%||EPS Growth Rank(?)||74|
|Market Cap (billions)||9.30||Size Rank||88|
|Trailing P/E Ratio||n/a||Trailing P/E Rank(?)||25|
|Forward P/E Ratio||n/a||Forward P/E Ratio Rank||n/a|
|PEG Ratio||0.72||PEG Ratio Rank||53|
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