Twitter Inc. (
is set to report first-quarter 2014 results on Apr 29. Last
quarter, Twitter disappointed by reporting a loss of $1.41 per
share, which was significantly wider than the Zacks Consensus
Estimate of a loss of 10 cents.
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Let's see how things are shaping up for this quarter.
Investors are expected to keenly follow Twitter's user growth
rate, engagement and monetization in the first quarter. Last
quarter, revenues surged 116.2% year over year and 44.0% quarter
over quarter to $242.7 million. User engagement in the form of
favorites and reTweets improved more than 35.0% on a
Growth Factors this Past Quarter
Per eMarketer, Twitter's maturing user base is a major concern
for its growth abilities. In such a scenario, user engagement
gains significant importance in order to limit churn rate to
other social sites such as
Twitter continues to launch new features that are aimed at
driving user engagement. The company allowed Vine application
users to send private text messages along with videos to their
network contacts as well as outsiders.
However, we note that Twitter's recent new features that are
similar to Facebook have failed to impress users. On the other
hand, the introduction of photo tagging feature for
iOS and Google's Android and an expected music service are the
key near-term growth drivers.
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 of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
: The Most Accurate estimate stands at loss of 26 cents per share
that coincides with the Zacks Consensus Estimate. Hence, the
difference is of 0.00 %.
Twitter's Zacks Rank #2 (Buy) when combined with a 0.00% ESP
makes surprise prediction difficult.
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.