Is Twitter Still A Growth Stock?
Want real-time analysis on Twitter? Try this.
Get real-time trading picks and analysis from experts beating the S&P like The Steady Trader.
Analysts were not expecting the numbers that Twitter Inc (NYSE: TWTR) posted for the fourth-quarter last Thursday. The 97 percent increase in revenue for the quarter when compared to the same quarter last year saw Twitter’s shares having their second-best day on Friday since its IPO. However, questions regarding the company’s user growth and user engagement still persist.
Can Twitter Still Be Classified As A Growth Stock?
“When you see 97 percent increase in revenues, most people would say, ‘Jeez! That’s growth,’ and that’s what people really want to see,” Greenberg said.
“It’s what the Street wants and with this company [...] they want both things. They want the active users and they want to see growth in revenue and ultimately in earnings. But this is a fickle market and investors can be fickle.”
He continued, “And if suddenly you see revenue really starting to consistently ramp – and it’s not going to ramp at 97 percent a quarter – but when you see it, people will suddenly start looking, ‘Whoa. Wait a minute; there’s something there in the business side of this company that makes sense.’ And that could justify its label as a growth company.”
“But between here and there, quite frankly, yeah we got to see another quarter, another two quarters.”
Will Twitter Have A 'Facebook Moment'?
SunTrust Robinson’s Bob Peck said that this year Twitter is going to have its “Facebook Moment.” Greenberg responded, “Well what could drive it is this logged off user [...] somebody who’s not active, who is actually using the service and is actually eyeballs and is actually getting value out of this. And that’s where your advertisers and sponsors and everyone else could possibly see stuff.”
“The moment people are looking for is when you see a consistency in the ability for this company through advertising or with other methods to be able to generate revenue and generate income.”
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.