It has been about a month since the last earnings report for Twitter, Inc. . Shares have added about 8.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Twitter Q1 Loss Narrower Than Expected, Revenues Beat
Twitter's first-quarter 2017 adjusted loss per share of $0.05 was narrower than the Zacks Consensus Estimate of a loss of $0.16 per share. Revenues of $548.3 million beat the Zacks Consensus Estimate of $512.1 million.
Plus, Twitter’s user growth was relatively impressive in the first quarter. Monthly average users (MAUs) increased from 319 million to 328 million this quarter, up 2.8% sequentially. Year over year, MAUs increased 6%. Daily average users (DAUs) were up 14% year over year.
As for Twitter’s live efforts, the company said it streamed over 800 hours of live video, encompassing some 450 odd events with 45 million unique viewers.
However, on a year-over-year basis, revenues were down 7.8%. Advertising revenues were down 11% in the quarter to $474 million.
Quarterly Numbers in Details
The company posted non-GAAP earnings of $0.11 per share, down from $0.15 reported in the prior year quarter.
In ad metrics, there was a 139% year-over-year surge in ad engagements but cost per ad engagement was down 63%, given the shift to auto-play video, which has lower cost-per-view compared to click-to-play.
Data licensing and other revenues increased 17% to $74 million.
Twitter earned nearly 38% of its revenues from international markets. International revenues rose 2% year over year to $208 million in the reported quarter while the U.S. revenues decreased 13% year over year to $341 million.
The company reported 6% decrease in adjusted EBITDA to $170 million. Adjusted EBITDA margin was 31%, up from 30.4% in the year-ago quarter.
Twitter reported an operating loss of $40.3 million, which compared favourably with a loss of $59.1 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
At the end of Mar 31, 2017, cash and cash equivalents (short-term investments) were $3.94 billion compared with $3.77 billion at the end of Dec 31, 2016. For the quarter, cash flow from operations was $203.5 million and adjusted free cash flow was $126.1 million.
Outlook
For 2017, stock-based compensation is expected to decrease in a range of 20%–25% year over year while capex will be in a band of $300–$400 million. Expenses are expected to be flat to down 5% year over year.
For the current quarter, adjusted EBITDA is expected to be in a range of $95–$115 million while EBITDA margin is expected to be in a band of 21%–21.5%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter. In the past month, the consensus estimate has shifted downward by 22.4% due to these changes.
VGM Scores
At this time, Twitter's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth investors based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
Image: Bigstock
Why Is Twitter (TWTR) Up 8.1% Since the Last Earnings Report?
It has been about a month since the last earnings report for Twitter, Inc. . Shares have added about 8.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Twitter Q1 Loss Narrower Than Expected, Revenues Beat
Twitter's first-quarter 2017 adjusted loss per share of $0.05 was narrower than the Zacks Consensus Estimate of a loss of $0.16 per share. Revenues of $548.3 million beat the Zacks Consensus Estimate of $512.1 million.
Plus, Twitter’s user growth was relatively impressive in the first quarter. Monthly average users (MAUs) increased from 319 million to 328 million this quarter, up 2.8% sequentially. Year over year, MAUs increased 6%. Daily average users (DAUs) were up 14% year over year.
As for Twitter’s live efforts, the company said it streamed over 800 hours of live video, encompassing some 450 odd events with 45 million unique viewers.
However, on a year-over-year basis, revenues were down 7.8%. Advertising revenues were down 11% in the quarter to $474 million.
Quarterly Numbers in Details
The company posted non-GAAP earnings of $0.11 per share, down from $0.15 reported in the prior year quarter.
In ad metrics, there was a 139% year-over-year surge in ad engagements but cost per ad engagement was down 63%, given the shift to auto-play video, which has lower cost-per-view compared to click-to-play.
Data licensing and other revenues increased 17% to $74 million.
Twitter earned nearly 38% of its revenues from international markets. International revenues rose 2% year over year to $208 million in the reported quarter while the U.S. revenues decreased 13% year over year to $341 million.
The company reported 6% decrease in adjusted EBITDA to $170 million. Adjusted EBITDA margin was 31%, up from 30.4% in the year-ago quarter.
Twitter reported an operating loss of $40.3 million, which compared favourably with a loss of $59.1 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
At the end of Mar 31, 2017, cash and cash equivalents (short-term investments) were $3.94 billion compared with $3.77 billion at the end of Dec 31, 2016. For the quarter, cash flow from operations was $203.5 million and adjusted free cash flow was $126.1 million.
Outlook
For 2017, stock-based compensation is expected to decrease in a range of 20%–25% year over year while capex will be in a band of $300–$400 million. Expenses are expected to be flat to down 5% year over year.
For the current quarter, adjusted EBITDA is expected to be in a range of $95–$115 million while EBITDA margin is expected to be in a band of 21%–21.5%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter. In the past month, the consensus estimate has shifted downward by 22.4% due to these changes.
Twitter, Inc. Price and Consensus
Twitter, Inc. Price and Consensus | Twitter, Inc. Quote
VGM Scores
At this time, Twitter's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth investors based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.