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Twitter (TWTR) Dips More Than Broader Markets: What You Should Know

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Twitter (TWTR) closed at $38.53 in the latest trading session, marking a -0.98% move from the prior day. This move lagged the S&P 500's daily loss of 0.13%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.14%.

Prior to today's trading, shares of the short messaging service had gained 8.81% over the past month. This has outpaced the Computer and Technology sector's loss of 2.49% and the S&P 500's loss of 3.32% in that time.

Wall Street will be looking for positivity from Twitter as it approaches its next earnings report date. On that day, Twitter is projected to report earnings of $0.14 per share, which would represent a year-over-year decline of 30%. Meanwhile, our latest consensus estimate is calling for revenue of $1.33 billion, up 12.12% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.66 per share and revenue of $5.89 billion, which would represent changes of +730% and +15.93%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Twitter. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Twitter currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Twitter is holding a Forward P/E ratio of 23.51. For comparison, its industry has an average Forward P/E of 40.05, which means Twitter is trading at a discount to the group.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% 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.

To follow TWTR in the coming trading sessions, be sure to utilize Zacks.com.


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