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Twitter (TWTR) Gains But Lags Market: What You Should Know

Zacks Equity Research

Twitter (TWTR) closed the most recent trading day at $26.41, moving +1.69% from the previous trading session. This change lagged the S&P 500's 6.24% gain on the day. Elsewhere, the Dow gained 6.38%, while the tech-heavy Nasdaq added 5.6%.

Heading into today, shares of the short messaging service had lost 25.01% over the past month, lagging the Computer and Technology sector's loss of 17.19% and the S&P 500's loss of 21.22% in that time.

Investors will be hoping for strength from TWTR as it approaches its next earnings release. On that day, TWTR is projected to report earnings of $0.14 per share, which would represent a year-over-year decline of 33.33%. Our most recent consensus estimate is calling for quarterly revenue of $864.85 million, up 9.91% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.81 per share and revenue of $3.91 billion. These totals would mark changes of -65.82% and +12.89%, respectively, from last year.

Any recent changes to analyst estimates for TWTR should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 has moved 5.77% lower. TWTR is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note TWTR's current valuation metrics, including its Forward P/E ratio of 31.98. This represents a discount compared to its industry's average Forward P/E of 32.56.

Meanwhile, TWTR's PEG ratio is currently 1.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.05 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 87, putting it in the top 35% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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