Twitter (TWTR) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Paychex (PAYX) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Twitter (TWTR) closed at $31.03 in the latest trading session, marking a -0.86% move from the prior day. This move lagged the S&P 500's daily loss of 0.09%. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, lost 0.16%.

Coming into today, shares of the short messaging service had gained 0.58% in the past month. In that same time, the Computer and Technology sector gained 4.21%, while the S&P 500 gained 2.35%.

Investors will be hoping for strength from TWTR as it approaches its next earnings release. On that day, TWTR is projected to report earnings of $0.14 per share, which would represent a year-over-year decline of 12.5%. Our most recent consensus estimate is calling for quarterly revenue of $773.26 million, up 16.3% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.84 per share and revenue of $3.48 billion. These totals would mark changes of -2.33% and +14.43%, respectively, from last year.

Any recent changes to analyst estimates for TWTR should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.56% lower within the past month. TWTR is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, TWTR currently has a Forward P/E ratio of 37.49. Its industry sports an average Forward P/E of 58.3, so we one might conclude that TWTR is trading at a discount comparatively.

It is also worth noting that TWTR currently has a PEG ratio of 1.55. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 3.15 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 82, putting it in the top 33% 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.

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


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