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Why Twitter (TWTR) May Top Earnings Estimates in a Big Way

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Twitter, Inc. (NYSE: TWTR ) should be the first place you look for a stock that is in a good position to beat earnings at its next report. TWTR stock, a firm in the Internet - Software sector, could be a great candidate for another beat.

Sure, it's no Facebook Inc. (NASDAQ: FB ) with consistent profits and strong share performance. But don't count TWTR stock out yet.

Twitter Inc. has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, TWTR has beaten estimates by at least 65% in both cases, suggesting it has a nice short-term history of crushing expectations.

Two quarters ago, TWTR stock was expected to post a loss of 11 cents per share, while it actually produced a loss of 3 cents per share, a beat of 72.7%. Meanwhile, for the most recent quarter, the company looked to deliver a loss of 16 cents per share, when it actually saw a loss of 5 cents per share instead, representing a 68.7% positive surprise.

TWTR Stock - Price and EPS Surprise

Thanks in part to this history, recent estimates have been moving higher for Twitter. In fact, the Earnings ESP for TWTR stock is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for TWTR, as the firm currently has a Zacks Earnings ESP of +16.67%, so another beat could be around the corner.

This is particularly true when you consider that TWTR has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that Twitter Inc. could see another beat at its next report, especially if recent trends are any guide for TWTR stock.

The post Why Twitter (TWTR) May Top Earnings Estimates in a Big Way appeared first on InvestorPlace .

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.

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