Why Shares Of Twitter Are Down By 13% Today?

Twitter Video 30.04.21.

Twitter Stock Dives As Quarterly Report Fails To Meet Traders’ Expectations

Shares of Twitter found themselves under significant pressure after the company released its quarterly earnings report. Twitter reported revenue of $1.04 billion and GAAP earnings of $0.08 per share, beating analyst estimates on both earnings and revenue.

The company stated that average monetizable daily active users totaled 199 million, which was mostly in line with the analyst consensus.

In the second quarter of 2021, Twitter expects to record revenue of $980 million – $1.08 billion and GAAP operating loss of $170 million – $120 million. Twitter does not expect to grow its revenue in the second quarter, and it looks that the market was not ready for this lack of growth after strong earnings reports from other tech companies.

What’s Next For Twitter?

While Twitter managed to beat analyst estimates, it has clearly missed traders’ expectations. The stock had a strong start of the year as traders bet that digital trends accelerated by the pandemic will help company grow at a fast pace.

Unfortunately for Twitter bulls, the company does not expect to increase its revenue in the second quarter, which is a strong bearish catalyst for a tech company in today’s market environment.

Analysts expect that Twitter will report earnings of $0.91 per share in 2021 and $1.23 per share in 2022, so the stock is trading at a forward P/E of 46 at current price levels. This is a rich valuation so Twitter should show the market how it will return to fast growth or the stock will find itself under more pressure.

It should be noted that analysts have already rushed to cut their price targets for Twitter stock, but most targets remain far above from current levels which means that analysts believe that the stock is a buy. While analysts remain optimistic, it remains to be seen whether Twitter shares will attract speculative traders who will be ready to buy the dip in the near term.

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