Twitter (TWTR) Dips More Than Broader Markets: What You Should Know
Twitter (TWTR) closed the most recent trading day at $37.21, moving -1.14% from the previous trading session. This move lagged the S&P 500's daily loss of 0.04%. Meanwhile, the Dow lost 0.05%, and the Nasdaq, a tech-heavy index, lost 0.01%.
Prior to today's trading, shares of the short messaging service had gained 2.87% over the past month. This has outpaced the Computer and Technology sector's loss of 1.99% and the S&P 500's gain of 0.34% in that time.
Investors will be hoping for strength from TWTR as it approaches its next earnings release. The company is expected to report EPS of $0.18, up 5.88% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $828.49 million, up 16.6% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.03 per share and revenue of $3.53 billion. These totals would mark changes of +19.77% and +15.97%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for TWTR. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TWTR is currently sporting a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that TWTR has a Forward P/E ratio of 36.62 right now. This represents a discount compared to its industry's average Forward P/E of 59.92.
Investors should also note that TWTR has a PEG ratio of 1.56 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.65 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 35% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.