Twitter (TWTR) closed at $42.14 in the latest trading session, marking a +0.57% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.13%. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, added 0.16%.
Coming into today, shares of the short messaging service had lost 4.75% in the past month. In that same time, the Computer and Technology sector lost 12.18%, while the S&P 500 lost 7.59%.
Twitter will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.02, up 103.7% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.32 billion, up 2.99% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $1.24 per share and revenue of $5.42 billion, which would represent changes of +520% and +6.66%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Twitter. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Twitter is currently a Zacks Rank #4 (Sell).
Looking at its valuation, Twitter is holding a Forward P/E ratio of 33.93. For comparison, its industry has an average Forward P/E of 44.02, which means Twitter is trading at a discount to the group.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 143, putting it in the bottom 44% 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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