) is set to report second-quarter 2014 results on Jul 29. Last
quarter, Twitter reported a loss of 22 cents per share, narrower
than the Zacks Consensus Estimate of a loss of 29 cents. Revenues
of $250.9 million were well ahead of the Zacks Consensus Estimate
of $237.0 million.
Let's see how things are shaping up for this quarter.
Growth Factors this Past Quarter
Investors are expected to keenly follow Twitter's user growth rate
and engagement in the second quarter. In the first quarter, Monthly
Average Users (MAUs) increased 25.0% from the year-ago quarter to
255 million. User interaction in the form of favorites and reTweets
improved more than 26.0% year over year in the last quarter.
We believe that the acquisitions of Cover, Gnip, TapCommerce and
Namo Media will expand Twitter's product portfolio and monetization
capability. The Omnicom partnership deal will boosts its status as
an advertising platform and the integration with MoPub will drive
top line in the near term.
Twitter's recent foray into e-Commerce by testing the 'Buy Now'
button and the acquisition of CardSpring is a significant positive,
in our view. The company also strengthened its management team by
hiring former Google executive, Katie Stanton, and former
Goldman-Sachs executive, Anthony Noto.
However, rising costs remains a concern as Twitter continues to
invest in product development, acquisitions and sales &
marketing. Intensifying competition from Facebook and Google are
the major headwinds.
Our proven model does not conclusively show that Twitter is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Negative Zacks ESP:
Twitter has a -3.45% ESP. That is because the Most Accurate
estimate stands at a loss of 30 cents per share, wider than the
Zacks Consensus Estimate of a loss of 29 cents.
Zacks Rank #4 (Sell):
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are a few stocks worth considering that, per our model, have
the right combination of elements to post an earnings beat this
Silicon Motion (
), with an Earnings ESP of +12.90% and a Zacks Rank #1.
Cognizant Technology Solutions (
), with an Earnings ESP of +6.90% and a Zacks Rank #1.
), with an Earnings ESP of +4.07% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
COGNIZANT TECH (CTSH): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
SILICON MOTION (SIMO): Free Stock Analysis
TWITTER INC (TWTR): Free Stock Analysis Report
To read this article on Zacks.com click here.