Twitter Inc’s (NYSE:TWTR): Twitter, Inc. operates as a platform for public self-expression and conversation in real time. On 31 December 2017, the US$22.09B market-cap posted a loss of -US$108.06M for its most recent financial year. The most pressing concern for investors is TWTR’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for TWTR, its year of breakeven and its implied growth rate.
TWTR is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$67.03M in 2018. Therefore, TWTR is expected to breakeven roughly a few months from now. How fast will TWTR have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 49.09% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving TWTR’s growth isn’t the focus of this broad overview, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that TWTR has managed its capital prudently, with debt making up 35.54% of equity. This means that TWTR has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of TWTR to cover in one brief article, but the key fundamentals for the company can all be found in one place – TWTR’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
- Valuation: What is TWTR worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether TWTR is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Twitter’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.