Twitter, Inc. (NYSE:TWTR) stock is a strong bargain under $30
If the analysts are accurate with their revenue and earnings estimates for Twitter’s (NYSE:TWTR) third-quarter report, Oct. 25 could be a perfect day for Twitter stock.
Of course, that’s a big if.
On the top line, analysts are forecasting $702 million in revenue, 19% higher year over year. On the bottom line, they see 14 cents a share — 40% higher than a year earlier.
Except for Q2 2018, TWTR has pulled off positive earnings surprises in three out of the last four quarters with an average beat of 37%.
A 37% beat in the third quarter would mean $144 million in earnings or 19 cents a share. That’s not half bad; however, we are talking about a non-GAAP beat.
The first thing investors will want to see is how severely the company’s cleanup of bots, fake users, etc., has affected monthly active users in the U.S.
In the second quarter, U.S. MAUs were 68 million, flat over Q2 2017, and one million less than Q1 2018. While it’s expected that MAUs could see a contraction from 68 million in both the third- and fourth-quarters, it’s important to know how that affects average revenue per user.
Last quarter, despite no growth in U.S. MAUs year-over-year, U.S. ARPU increased by 10% to $5.40 from $4.91 a year earlier. On the international front, ARPU increased by 39% to $1.29 from 93 cents a year earlier.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 29.88.
The projected lower bound is: 24.97.
The projected closing price is: 27.43.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with TWITTER INC), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 25.6593. This is not an overbought or oversold reading. The last signal was a sell 3 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 40.11. 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 buy 26 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 -40. This is not a topping or bottoming area. The last signal was a sell 3 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 buy 20 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed down -1.230 at 27.540. Volume was 27% above average (neutral) and Bollinger Bands were 65% narrower than normal.
Open High Low Close Volume___
28.850 29.760 27.310 27.540 6,103,836
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 28.66 30.56 33.16
Volatility: 48 52 69
Volume: 4,902,528 4,315,740 5,553,288
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 16.9% below its 200-period moving average and is in an upward 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 bullish on TWTR.N and have had this outlook for the last 2 periods.
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