Twitter, Inc. (NYSE:TWTR) Q3 2019 Earnings Preview
Twitter TWTR stock has surged roughly 40% in 2019 to fall just behind Facebook’s FB 45%. Despite the run of success, Twitter shares remain an enigma to many on Wall Street.
TWTR’s Quick Pitch
Twitter is an invaluable platform that helps journalists, companies, and anyone in between spread information instantly. The social media company has also expanded its digital video business in recent years as it grabs live streaming TV rights in the Netflix NFLX age. In fact, Twitter landed the streaming rights to the NFL’s Thursday Night Football the year before Amazon AMZN.
Twitter has also been able to grow its advertising business in recent years. But it has found it somewhat difficult to expand its user base on a consistent basis and the growth of Instagram and other platforms such as Snapchat SNAP have made things harder. With that said, Twitter’s average Monetizable Daily Active Usage climbed 14% last quarter to 139 million.
President Trump’s favorite form of communication might jump to the forefront as the 2020 election cycle heats up. It is also worth remembering that Twitter has spent heavily to clean up its platform of bots. “We also continued our work to proactively identify and address malicious behavior, resulting in an 18% drop in reports of spammy or suspicious behavior across all Tweet detail pages, which show the replies to any given Tweet on our service,” CEO Jack Dorsey, who also runs Square SQ, said in prepared remarks last quarter.
As investors can see, shares of Twitter are down 18% over the last five years, against its industry’s 80% average climb. With that said, TWTR stock has skyrocketed 140% in the last three years to crush the Computer Software-Services Market’s 41% expansion and Facebook’s 50%.
Much of this growth has come over the past 24 months. Still, Twitter stock closed regular trading Wednesday at $39.91 per share, 13% below its 52-week highs. This could give the stock room to run if it is able to impress Wall Street.
Twitter is also now trading at a relatively reasonable forward earnings multiple. TWTR is trading at 38X forward 12-month Zacks Consensus earnings estimates, which comes in above its industry’s 27.7X average but far below its own one-year median of 60.7X and its 12-month high of 93.7X.
Overall, the bias in prices is: Sideways.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 42.22.
The projected lower bound is: 37.54.
The projected closing price is: 39.88.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 51.2110. This is not an overbought or oversold reading. The last signal was a buy 9 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 42.67. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 51 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -29. This is not a topping or bottoming area. The last signal was a buy 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 24 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed down -0.370 at 39.910. Volume was 36% below average (neutral) and Bollinger Bands were 7% wider than normal.
Open High Low Close Volume___
39.970 40.460 39.600 39.910 1,648,051
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 40.02 41.80 36.70
Volatility: 26 35 46
Volume: 1,894,997 2,371,752 2,965,527
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TWITTER INC is currently 8.7% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of TWTR.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TWTR.N and have had this outlook for the last 21 periods.