Market Overview

Twitter: The Crowd Is Becoming Increasingly Bullish On EPS


Shares of Twitter Inc (NYSE: TWTR) gained about 2 percent on Monday morning, as the announcement of its first quarter financial results gets closer. The company is scheduled to report them on Tuesday, after the market closes.

According to Estimize, there is a substantial divergence between the company’s guidance, the Street’s consensus estimates and the crowd’s mean projection.

The crowd is the most bullish, expecting EPS of $0.07 on revenue of $464.5 million, versus EPS of $0.00 in the same quarter last year, and $0.12 in the last reported quarter.

The Street models consensus EPS of $0.04, 42 percent below the crowd, on revenue of $456.46 million.

The company did not provide earnings guidance, but did guide revenue of $445 million, well under Wall Street and Main Street’s estimates.

Related Link: Wunderlich Previews The Hottest Tech Earnings This Week

The graph below shows Twitter’s history of estimates versus actual earnings:

It's also possible to see how estimates have changed over time.

As evidenced by the above chart, the Street’s estimates have been unchanged over the quarter. However, the crowd has become increasingly bullish.

Analysts Say…

In a recent report, analysts at Wunderlich Securities noted that Twitter will “benefit from growing adoption of its platform from advertisers and a widening reach of users from its homepage redesign.” Advertiser adoption will help it to "beat consensus and guidance."

However, the analysts warn that while the reach and monetization are improving, "a lot of good news is already priced in."

For his part, SunTrust analyst Bob Peck says that while the firm is a big believer “in the long-term opportunity in front of Twitter and believe[s] the company will report a strong Q1,” he thinks “the negative risks create enough concern and likely result in a range-bound stock in the near term."

Posted-In: Bob Peck Estimize SunTrust SunTrust Robinson Humphrey WunderlichAnalyst Color Previews Trading Ideas


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