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Twitter (TWTR) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Twitter (TWTR) closed the most recent trading day at $32.69, moving -0.27% from the previous trading session. This change lagged the S&P 500's 0.7% gain on the day. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 1.04%.

Coming into today, shares of the short messaging service had gained 8.18% in the past month. In that same time, the Computer and Technology sector gained 7.4%, while the S&P 500 gained 4.38%.

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%. Meanwhile, our latest consensus estimate is calling for revenue of $997.35 million, up 9.74% from the prior-year quarter.

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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.26% lower within the past month. TWTR currently has a Zacks Rank of #4 (Sell).

Digging into valuation, TWTR currently has a Forward P/E ratio of 38.86. For comparison, its industry has an average Forward P/E of 56.39, which means TWTR is trading at a discount to the group.

Also, we should mention that TWTR has a PEG ratio of 1.36. 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 was holding an average PEG ratio of 2.52 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 109, putting it in the top 43% 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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