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With Social Media Use Set to Grow in 2018, Buy Twitter (TWTR)
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The likes of Merck (MRK - Free Report) and UnitedHealth (UNH - Free Report) have helped lift the Dow to new heights in 2018, while early gains from Amazon (AMZN - Free Report) just might have signaled that the tech sector is on track for another outstanding year.
However, as investors begin to review the 2018 investment landscape, much talked about social media firms might not be a bad place to start, as their use and importance for advertisers is set to expand this year.
One company that might stand to benefit from greater social media usage in 2018 is the sometimes-maligned Twitter .
Recent Updates
The market research firm eMarketer noted in a recent report that social media use in the U.S. is expected to climb to new heights in 2018, which is a positive sign for Twitter, as it could use any boost in the daily or monthly active user category that it can get.
This year, the U.S. social media user base is expected to hit 200 million, which is just 32 million shy of the entire U.S. adult television audience and would account for over 61% of the total U.S. population. Social media use will also reportedly fall just 29 million users short of the total digital video audience.
Twitter has also recently received a few notable upgrades. In mid-December, J.P. Morgan (JPM) upgraded Twitter from “Hold” to “Overweight” and upped its price target to $27 per share. J.P. Morgan analyst Doug Anmuth called the social media company “one of our top” small- to mid-cap picks for 2018.
"We believe both the TWTR story and financial results will strengthen over the next year as the company continues to build on its differentiated value proposition for users & returns to revenue growth," Anmuth wrote in a note to clients.
On Tuesday, Aegis Capital analysts upgraded Twitter to a “Buy.” The firm noted that 2018 will mark "an inflection point" for the social media company. Aegis said that it expects Twitter to become GAAP profitable, sparked by “sustained double-digit growth” in daily active users.
Current Fundamentals
During the third-quarter, Twitter grew its DAU base by 14% year-over-year. This marked the fourth consecutive quarter of double-digit growth in this category. Twitter was also able to grow its monthly active user base by 4% in Q3. The social media company now boasts 330 million MAUs.
The company also began to tout its first real foray into live streaming last quarter. Twitter noted that it streamed over 830 live events in Q3, with 74% reaching a global audience. Twitter also noted that it signed 30 new “live” deals.
Twitter is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system, helping the company earn an overall “B” VGM score.
Looking ahead to the fourth quarter, Twitter is expected to see its revenues and earnings dip, based on our current Zacks Consensus Estimates. However, 2018 is when analysts project that Twitter is set to finally break out of its time in the red.
For Twitter’s full fiscal 2018, the company’s bottom-line is expected to hit $0.45 per share, while its full-year revenues are projected to reach $2.59 billion, marking a 7.84% year-over-year jump from its 2017 projections.
In terms of long-term earnings growth potential, Twitter is expected to expand its EPS figures at an annualized rate of 21.50% over the next three to five years. Alone, this figure might help investors regain confidence in Twitter, and investors might be even more excited if they pair this EPS growth projection with the expectation that social media use will grow rapidly in 2018.
Shares of Twitter have skyrocketed over 46% in the last 12-weeks alone, which blows away the S&P 500 and the “Internet – Software” industry average. However, in spite of this massive run, shares of Twitter rest 4.5% below their 52-week high as of Tuesday’s close.
This means that investors could buy shares at a somewhat discounted price ahead of what many predict will be a stellar 2018 for Twitter. The company is set to report its fourth-quarter and full-year 2017 results before the opening bell on Feb. 8.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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With Social Media Use Set to Grow in 2018, Buy Twitter (TWTR)
The likes of Merck (MRK - Free Report) and UnitedHealth (UNH - Free Report) have helped lift the Dow to new heights in 2018, while early gains from Amazon (AMZN - Free Report) just might have signaled that the tech sector is on track for another outstanding year.
However, as investors begin to review the 2018 investment landscape, much talked about social media firms might not be a bad place to start, as their use and importance for advertisers is set to expand this year.
One company that might stand to benefit from greater social media usage in 2018 is the sometimes-maligned Twitter .
Recent Updates
The market research firm eMarketer noted in a recent report that social media use in the U.S. is expected to climb to new heights in 2018, which is a positive sign for Twitter, as it could use any boost in the daily or monthly active user category that it can get.
This year, the U.S. social media user base is expected to hit 200 million, which is just 32 million shy of the entire U.S. adult television audience and would account for over 61% of the total U.S. population. Social media use will also reportedly fall just 29 million users short of the total digital video audience.
Twitter has also recently received a few notable upgrades. In mid-December, J.P. Morgan (JPM) upgraded Twitter from “Hold” to “Overweight” and upped its price target to $27 per share. J.P. Morgan analyst Doug Anmuth called the social media company “one of our top” small- to mid-cap picks for 2018.
"We believe both the TWTR story and financial results will strengthen over the next year as the company continues to build on its differentiated value proposition for users & returns to revenue growth," Anmuth wrote in a note to clients.
On Tuesday, Aegis Capital analysts upgraded Twitter to a “Buy.” The firm noted that 2018 will mark "an inflection point" for the social media company. Aegis said that it expects Twitter to become GAAP profitable, sparked by “sustained double-digit growth” in daily active users.
Current Fundamentals
During the third-quarter, Twitter grew its DAU base by 14% year-over-year. This marked the fourth consecutive quarter of double-digit growth in this category. Twitter was also able to grow its monthly active user base by 4% in Q3. The social media company now boasts 330 million MAUs.
The company also began to tout its first real foray into live streaming last quarter. Twitter noted that it streamed over 830 live events in Q3, with 74% reaching a global audience. Twitter also noted that it signed 30 new “live” deals.
Twitter is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system, helping the company earn an overall “B” VGM score.
Looking ahead to the fourth quarter, Twitter is expected to see its revenues and earnings dip, based on our current Zacks Consensus Estimates. However, 2018 is when analysts project that Twitter is set to finally break out of its time in the red.
For Twitter’s full fiscal 2018, the company’s bottom-line is expected to hit $0.45 per share, while its full-year revenues are projected to reach $2.59 billion, marking a 7.84% year-over-year jump from its 2017 projections.
In terms of long-term earnings growth potential, Twitter is expected to expand its EPS figures at an annualized rate of 21.50% over the next three to five years. Alone, this figure might help investors regain confidence in Twitter, and investors might be even more excited if they pair this EPS growth projection with the expectation that social media use will grow rapidly in 2018.
Shares of Twitter have skyrocketed over 46% in the last 12-weeks alone, which blows away the S&P 500 and the “Internet – Software” industry average. However, in spite of this massive run, shares of Twitter rest 4.5% below their 52-week high as of Tuesday’s close.
This means that investors could buy shares at a somewhat discounted price ahead of what many predict will be a stellar 2018 for Twitter. The company is set to report its fourth-quarter and full-year 2017 results before the opening bell on Feb. 8.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>