Markets

Bear of the Day: Twitter (TWTR)

A generic image of a stock chart
Credit: Shutterstock photo

Though Twitter's ( TWTR ) adjusted loss of $0.03 per share beat the Zacks Consensus Estimate of a loss of $0.11, the company reported revenue of $717.2 million, missing the Zacks Consensus Estimate of $737.7 million and logging only 1% year-over-year growth.

Investors should also note that the company's loss from operations is much larger this year compared to last year. Twitter reported a loss of $143 million this quarter, compared to $67 million during the same time last year.

Wall Street analysts have piled on since that Feb 9 report with downgrades, lowered price targets, and, more to the point for our purposes with the Zacks Rank, downward revisions to "earnings" estimates.

Twitter reported 4% user growth to 319 million monthly active users year-over-year; however, Twitter's Q4 had the least user gain in 2016 with only two million additional monthly active users. Revenue from advertising was also down slightly from last year's $641 million to $638 million.

"We overcame the toughest challenge for any consumer service at scale by reversing declining audience trends and re-accelerating usage," said Jack Dorsey, Twitter's CEO. "While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service. This will take time, but we're moving fast to show results."

Speaking of Mr. Dorsey, I had two "encounters" with him on Valentine's Day.

The first one is a billion-dollar idea that I shared with him on Twitter. Unfortunately, this monster idea wasn't mine. But it did come from a colleague and he has promised to introduce me to Jack after Twitter hires him as a consultant.

Below is the article link for Eric Dutram's billion-dollar idea. And I'm not joking when I call it that. As I said, I even tweeted the article to Jack himself.

Here's why: as a Facebook investor, I've been intensely studying that web monster's advertising phenomenon for the past few months. They did over $26 billion in ad revenue in 2016 for some very important reasons. They will keep on doing it this year when it grows to $35 billion.

And Twitter has a chance to follow suit. Go check out Eric's article here and found out how...

How Twitter Can Fix Itself by Learning from YouTube

Final word on Jack Dorsey and Twitter: For Valentine's Day, Jack bought some stock. 426,000 shares of TWTR to be exact, worth about $7 million, and bringing his stake to over 15 million shares. It was a confidence buy, much like Jamie Dimon's gutsy and visionary purchase of millions worth of JPMorgan (JPM) last year.

Or an "I love you" one anyway.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>

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

Twitter, Inc. (TWTR): Free Stock Analysis Report

J P Morgan Chase & Co (JPM): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TWTR JPM

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More