In the latest trading session, Twitter (TWTR – Free Report) closed at $32.55, marking a -0.25% move from the previous day. This change lagged the S&P 500’s daily of 0%. Meanwhile, the Dow gained 0.08%, and the Nasdaq, a tech-heavy index, lost 0.18%.
Coming into today, shares of the short messaging service had gained 4.68% in the past month. In that same time, the Computer and Technology sector gained 4.19%, while the S&P 500 gained 3.37%.
Investors will be hoping for strength from TWTR as it approaches its next earnings release. In that report, analysts expect TWTR to post earnings of $0.28 per share. This would mark a year-over-year decline of 9.68%. Meanwhile, our latest consensus estimate is calling for revenue of $997.35 million, up 9.74% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.39 per share and revenue of $3.46 billion. These totals would mark changes of +177.91% and +13.75%, respectively, from last year.
Any recent changes to analyst estimates for TWTR should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.15% lower within the past month. TWTR is currently sporting a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that TWTR has a Forward P/E ratio of 13.65 right now. For comparison, its industry has an average Forward P/E of 60.05, which means TWTR is trading at a discount to the group.
Also, we should mention that TWTR has a PEG ratio of 0.48. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Internet – Software was holding an average PEG ratio of 2.85 at yesterday’s closing price.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 149, putting it in the bottom 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow TWTR in the coming trading sessions, be sure to utilize Zacks.com.