Twitter stock is one to watch as the social media giant gets set to report second-quarter earnings while working through a business recovery that started in the third quarter of 2017.
An area of focus during the earnings report will be user growth, as Twitter (TWTR) has reportedly slashed millions of suspicious accounts. The suspensions and shutdowns of accounts by Twitter are part of its effort to clear up the platform, allegedly used in an attempt to illegitimately sway the 2016 U.S. elections.
Twitter, a provider of online news and messaging services, is currently a member of the IBD 50, a flagship screen of leading growth stocks. These are companies that show strong relative price strength and top-notch fundamentals, among other traits.
Twitter stock is up 26% since breaking out from a cup-with-handle base at a buy point of 33.88 on May 21. The stock made a strong run in June, despite that the breakout came in low volume. Twitter shares hit a three-year high of 47.79 on June 15 and since formed a healthy flat base that suggests stock accumulation. Its current buy point is 47.89.
Twitter shares closed at 43.31, down 0.3% on the stock market today. Twitter stock has more the doubled in the past 12 months.
Second-Quarter Estimates
Twitter sports a strong Relative Price Strength Rating of 98 out of a possible 99 and an IBD Composite Rating of 99.
The company will report second-quarter earnings before the market opens Friday. Analysts expect Twitter to report revenue of $698 million. That’s a 22% increase from the year-ago period and would be its best growth in nine quarters. Analysts say adjusted earnings should reach 17 cents per share. That’s more than double what it reported in the same quarter a year ago.
Twitter stock has turned into a compelling turnaround story after reporting a 21% increase in first-quarter revenue in late April.
Expectations are ramping up as the platform stabilizes, said a report on internet stocks by Baird Equity Research last week.
“We expect another quarter of improving results, as recent platform changes drive higher levels of advertiser engagement,” Baird said in a research note to clients.
Significant Strides For Twitter Stock
Questions for the earnings call will be about efforts to clean up and expanded the Twitter platform. User acquisition and retention trends also will be a focus, Baird said.
Twitter recently announced partnerships with Disney and Viacom for live content/streaming on the platform.
“Twitter has made significant strides over the last year to improve the utility of its product, along with deeper integration with established media brands that could provide user growth/engagement tailwinds,” Baird said.
