Back to top

The Zacks Analyst Blog Highlights: Twitter, Facebook, Snap, Square and Amazon

Read MoreHide Full Article

For Immediate Release

Chicago, IL –February 8, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Twitter (TWTR - Free Report) , Facebook (FB - Free Report) , Snap Inc. (SNAP - Free Report) , Square (SQ - Free Report) and Amazon (AMZN - Free Report) .

Here are highlights from Thursday’s Analyst Blog:

What’s Next for Twitter (TWTR - Free Report) Stock After Q4 Monthly User Decline?

Shares of Twitter plummeted over 10% Thursday morning despite posting stronger-than-anticipated Q4 earnings and revenue results. Investors and Wall Street instead seemed worried about the social media company’s declining user base as it tries to clean up its platform amid the “fake news” and misinformation concerns it has faced alongside Facebook.

Q4 Overview

Twitter’s Q4 revenues jumped 24% from the year-ago period to reach $909 million, which crushed our $871.59 million Zacks Consensus Estimate. At the bottom end of the income statement, TWTR’s adjusted quarterly earnings soared over 63% to reach $0.31 a share and blow away our $0.25 estimate.

Twitter posted its first full year of profitability in 2018 and record quarterly revenues. This helped show that its efforts to remove fake accounts and promote a so-called healthier discourse has paid off, or at least not taken away from its appeal to advertisers. 

Quarterly advertising revenues climbed 23% to $791 million, which topped our NFM estimate. Ads accounted for about 87% of Twitter’s fourth-quarter revenue. Meanwhile, its growing data licensing business surged 35% to hit $107.87 million.

Users

Clearly, there didn’t seem too much to be disappointed about in terms of Twitter’s core top and bottom-line metrics, which could mean investors are worried about Twitter’s user growth.

Twitter’s daily active user numbers, which it officially reported for the first time in Q4, popped 1.6% to 126 million. For quick perspective, Facebook boats 1.52 billion DAUs and Snap Inc.’s Snapchat posted 186 million. But Twitter said that it reports its figures differently than its fellow social media firms because it only counts users who can view ads.

Meanwhile, Twitter’s monthly active user figure, which it has reported for years, fell 1.5% sequentially to 321 million. The company saw its MAU’s fall by 9 million from the year-ago period. Twitter’s MAUs have fallen for three quarters in a row. In a sign that Twitter expects this trend to continue, the company said it plans to stop disclosing monthly users after the current quarter. 

Despite the user decline, total ad engagements surged 33% as cost per engagement dipped 7%. Both of these are positive signs and suggest that Twitter’s user decline includes fake, spam-style accounts. “We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service,” CEO Jack Dorsey, who also runs Square, said in prepared remarks.

Outlook

Twitter has been a hard stock to own since it went public in the fall of 2013. Shares of Twitter fell over 10% through morning trading Thursday to sink as low as $30.31 a share on more than double its normal daily trading volume. This marked a roughly 37% downturn from its 52-week high of $47.79 per share.

Looking ahead, Twitter provided Q1 2019 revenue guidance between $715 million and $775 million, which would mark a sequential decline. The low point and the mid-point also represent a worrisome sign as it falls below our current $762.46 million estimate. 

Going forward, Twitter is likely to remain attractive to advertisers because it is an invaluable platform for millions of people to consume information, from breaking news to entrainment. On top of that, Twitter is likely to benefit simply due to the rise of non-ad supported platforms like Amazon Prime and others. Twitter has also actively expanded its own live streaming video offerings through deals with dozens of media outlets.

Bottom Line

Twitter executives noted that the company is set to face higher expenses in 2019 as it furthers its fight against abuse on its platform, along with increased spending on new features, and a growing employee headcount. Therefore, Twitter could remain hard to gauge, but TWTR stock certainly has plenty of room to run this year. And the company’s pitch to users and marketers is simple.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?

From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.

This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.

See Stocks Today >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                      

http://www.zacks.com                                                   

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.



More from Zacks Press Releases

You May Like