Twitter, Inc. (NYSE:TWTR) stock is cheap, and it doesn’t need huge user growth to thrive
Twitter (NYSE:TWTR) stock is down nearly 3% in the last month after the company reported mixed fourth-quarter results. But while Twitter certainly has some hurdles to clear in 2019, the bull case on Twitter stock is very much alive and well.
Twitter historically struggled to monetize its user base, especially compared to Facebook. However, after TWTR steadily improved its ad business for years, TWTR stock has become an under-the-radar value play. Twitter stock currently has a price-earnings ratio of 20.1. That number is certainly not bad for a company that grew its revenue by 24% and reported that its non-GAAP net income jumped by an impressive 73% YoY in Q4.
On top of those numbers, Twitter has produced $1.34 billion of cash from its operations over the past four quarters, and it’s generated $856 million of free cash flow during that period. That free cash flow was up YoY, even though its capital expenditures jumped 73%.
But perhaps Twitter’s biggest asset isn’t as easily quantified. Specifically, Twitter’s true long-term value may rest in the fact that there’s nothing else like it in the world. As Citron’s Andrew Left pointed out last year, most of the important news in sports, politics and finance broke on Twitter in 2018.
“Twitter has never been more relevant than now, and money follows relevancy,” Left said at the time.
Left later called Twitter the “Harvey Weinstein of social media,” but I think his take on Twitter’s valuable position as the top platform for real-time news dissemination is more relevant.
Bottom Line on Twitter Stock
Twitter stock is one of the core investments positioned to benefit from continued growth trends in mobile-internet usage and streaming video. Those two trends should be among the biggest digital trends in tech for years to come.
The potential size of the mobile and streaming internet markets are so large that Twitter doesn’t even have to match or beat Facebook’s market share — it just needs to get enough of the social-media pie to continue to develop its niche business.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 34.28.
The projected lower bound is: 27.53.
The projected closing price is: 30.91.
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 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.
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 51.0268. This is not an overbought or oversold reading. The last signal was a buy 8 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 46.40. 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 41 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 0. This is not a topping or bottoming area. The last signal was a buy 9 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 1 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed down -0.980 at 31.010. Volume was 21% below average (neutral) and Bollinger Bands were 25% narrower than normal.
Open High Low Close Volume___
31.890 31.960 30.990 31.010 3,417,988
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 31.22 31.57 34.11
Volatility: 34 69 68
Volume: 3,264,507 4,039,499 4,941,508
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 9.1% below 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 4 periods.