Twitter (TWTR) closed at $31.64 in the latest trading session, marking a +0.38% move from the prior day. This move outpaced the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.
Coming into today, shares of the short messaging service had gained 4.93% in the past month. In that same time, the Computer and Technology sector gained 6.72%, while the S&P 500 gained 4.69%.
TWTR will be looking to display strength as it nears its next earnings release. On that day, TWTR is projected to report earnings of $0.28 per share, which would represent a year-over-year decline of 9.68%. Our most recent consensus estimate is calling for quarterly revenue of $997.35 million, up 9.74% from the year-ago period.
It is also important to note the recent changes to analyst estimates for TWTR. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.26% lower within the past month. TWTR is currently a Zacks Rank #4 (Sell).
Investors should also note TWTR's current valuation metrics, including its Forward P/E ratio of 37.36. Its industry sports an average Forward P/E of 53.51, so we one might conclude that TWTR is trading at a discount comparatively.
Also, we should mention that TWTR has a PEG ratio of 1.31. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 2.34 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 148, which puts it in the bottom 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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