The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
On Thursday 5 February Twitter is due to post its fourth-quarter figures. The adjusted earnings per share are due to improve from $0.01 up to $0.061 and the sales are also called to increase from $361.266 million up to $453.788 million. Having made a loss of $175.305 million last quarter, this time round Twitter is expected to make a pre-tax profit of $45.273 million.
Of those institutions that follow Twitter, 18 have it as a buy, 21 have it as a hold and three as a sell. Even though the support is broadly undecided, the 12-month price target of $50.15 offers considerable upside from today’s $37.20 price. In comparison to many of the major US corporates that I have written about, a 35% premium is considerably attractive possibly reflecting the early stage in the company’s growth cycle.
Twitter has launched two new functions for its product. The first enables multi-person private conversations, and the second is 30 second video content. As with any new changes there will be those who do not like them, but the majority should deem them as improvements.
These longer running video contents will be the precursor to even longer videos — a revenue stream that could prove particularly successful especially when you consider how popular twitter is with politicians, stars and athletes. The video functionality is still being rolled out to users but so far the reviews have been very kind about the practicality, ease of use and end product.
The last couple of months have seen the shares bumping along just above the $36 level. However, these latest developments should open up the attractiveness of Twitter to another stream of potential users and reinvigorate its share price.