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Can Twitter (TWTR) Deliver a Beat This Earnings Season?
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Twitter is set to report first-quarter 2018 results on Apr 25. We believe the company’s strength in video advertising coupled with focus on live video streaming will boost top-line growth.
Earnings Trend Impressive
The company beat the Zack Consensus Estimate in all the trailing four quarters, delivering an average positive surprise of 153.10%.
In the last reported quarter, Twitter posted non-GAAP earnings per share of 19 cents, which came ahead of the Zacks Consensus Estimate of 14 cents per share and increased 72.7% year over year.
Revenues of $732 million increased 2% from the year-ago quarter and beat the consensus mark of $690 million. The year-over-year increase in revenues was impressive, given the continuous decline in revenues in the first three quarters of 2017.
The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $609.87 million while that for earnings stands at 12 cents per share.
Twitter has been experimenting a lot in the last few months by bringing attractive features in its attempt to make the platform more engaging.
We note that the rollout of the 280-character limit for tweets (double from the legacy 140 limit) and introduction of Threads have made tweeting easier and more expressive. These have also resulted in an uptick in tweet impressions.
Twitter’s recent tweak in timeline to highlight major news events other than the current focus on sports-based news is expected to increase user engagement on the platform and be accretive to growth.
The company has also been focusing on "live" to turn around its fortunes. Live streaming has resulted in an increase in user engagement. The company streamed 1,100 live events in the last reported quarter and secured 22 new live partnerships, which include nine international ones.
Notably, in the last quarter, Twitter delivered GAAP profit for the first time in its 10-year history. Management remains focused on improving the core platform, which is likely to sustain its profitability.
For the first quarter, the Zacks Consensus Estimate for monthly average users (MAUs) is 334 million, up 6 million from the year-ago period and 4 million sequentially, driven by growth in international market.
Higher Ad Revenues to Boost the Top Line
Twitter’s ability to attract advertising revenues amid significant competition from the likes of Facebook , Snap’s (SNAP - Free Report) messaging app Snapchat and Alphabet (GOOGL - Free Report) will be a key factor determining its growth.
As video ads generate more revenues than text-based substitutes, Twitter is trying to incorporate more video-oriented content to earn higher advertising revenues. Strength in Video Website Cards, Video App Cards, In-Stream Sponsorships, and In-Stream Video Ads is encouraging.
The Zacks Consensus Estimate for advertising revenues stands at $529 million, 11.6% more than the year-ago quarter actual figure.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Twitter has a Zacks Rank #2 and its Earnings ESP is +4.00%. Therefore, our proven model shows that the company is likely to deliver a positive surprise this quarter.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Twitter (TWTR) Deliver a Beat This Earnings Season?
Twitter is set to report first-quarter 2018 results on Apr 25. We believe the company’s strength in video advertising coupled with focus on live video streaming will boost top-line growth.
Earnings Trend Impressive
The company beat the Zack Consensus Estimate in all the trailing four quarters, delivering an average positive surprise of 153.10%.
In the last reported quarter, Twitter posted non-GAAP earnings per share of 19 cents, which came ahead of the Zacks Consensus Estimate of 14 cents per share and increased 72.7% year over year.
Revenues of $732 million increased 2% from the year-ago quarter and beat the consensus mark of $690 million. The year-over-year increase in revenues was impressive, given the continuous decline in revenues in the first three quarters of 2017.
The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $609.87 million while that for earnings stands at 12 cents per share.
Twitter, Inc. Price and EPS Surprise
Twitter, Inc. Price and EPS Surprise | Twitter, Inc. Quote
Engaging Features to Drive User Growth
Twitter has been experimenting a lot in the last few months by bringing attractive features in its attempt to make the platform more engaging.
We note that the rollout of the 280-character limit for tweets (double from the legacy 140 limit) and introduction of Threads have made tweeting easier and more expressive. These have also resulted in an uptick in tweet impressions.
Twitter’s recent tweak in timeline to highlight major news events other than the current focus on sports-based news is expected to increase user engagement on the platform and be accretive to growth.
The company has also been focusing on "live" to turn around its fortunes. Live streaming has resulted in an increase in user engagement. The company streamed 1,100 live events in the last reported quarter and secured 22 new live partnerships, which include nine international ones.
Notably, in the last quarter, Twitter delivered GAAP profit for the first time in its 10-year history. Management remains focused on improving the core platform, which is likely to sustain its profitability.
For the first quarter, the Zacks Consensus Estimate for monthly average users (MAUs) is 334 million, up 6 million from the year-ago period and 4 million sequentially, driven by growth in international market.
Higher Ad Revenues to Boost the Top Line
Twitter’s ability to attract advertising revenues amid significant competition from the likes of Facebook , Snap’s (SNAP - Free Report) messaging app Snapchat and Alphabet (GOOGL - Free Report) will be a key factor determining its growth.
As video ads generate more revenues than text-based substitutes, Twitter is trying to incorporate more video-oriented content to earn higher advertising revenues. Strength in Video Website Cards, Video App Cards, In-Stream Sponsorships, and In-Stream Video Ads is encouraging.
The Zacks Consensus Estimate for advertising revenues stands at $529 million, 11.6% more than the year-ago quarter actual figure.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Twitter has a Zacks Rank #2 and its Earnings ESP is +4.00%. Therefore, our proven model shows that the company is likely to deliver a positive surprise this quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>