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

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Twitter (TWTR - Free Report) closed at $38.38 in the latest trading session, marking a +0.39% move from the prior day. This change outpaced the S&P 500's 0.16% gain on the day. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, added 0.49%.

Coming into today, shares of the short messaging service had lost 3.36% in the past month. In that same time, the Computer and Technology sector lost 8.85%, while the S&P 500 lost 6.79%.

Investors will be hoping for strength from Twitter as it approaches its next earnings release. The company is expected to report EPS of $0.14, down 30% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.32 billion, up 11.19% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.62 per share and revenue of $5.84 billion, which would represent changes of +710% and +15.1%, respectively, from the prior year.

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

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. Within the past 30 days, our consensus EPS projection has moved 4.23% lower. Twitter currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Twitter is holding a Forward P/E ratio of 23.6. This represents a discount compared to its industry's average Forward P/E of 43.6.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 147, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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