Posted on 07/27/2018 6:29:21 AM PDT by Red Badger
Twitter Inc (NYSE: TWTR) shares plummeted 12 percent Friday morning after the company reported a drop in active users in the second quarter. While Twitter has been making major improvements to its platform, analysts say the stock is pricing in unrealistic growth expectations, and the latest numbers seem to confirm that belief.
Twitter reported second-quarter adjusted earnings per share of 17 cents, in line with consensus analyst estimates. Revenue of $711 million beat Wall Street expectations of $698.2 million. Revenue was up 24 percent from a year ago.
Despite the revenue beat, investors zeroed in on Twitters 335 million monthly active user count, which came up well short of consensus expectations of 338.5 million and was 1 million less than the 336 million the company reported a quarter ago. The lost MAUs came primarily from the U.S., where MAU count fell from 69 million in the first quarter to 68 million in the second quarter.
Investors had been concerned that reports Twitter had been suspending as many as 1 million fake accounts per day in the second quarter could negatively impact reported user numbers. Twitter said it removed a total of about 70 million accounts in the second quarter but said most of those accounts were never included in active user counts because they were less than one month old.
Our second-quarter results reflect the work were doing to ensure more people get value from Twitter every day, CEO Jack Dorsey says in a statement. These efforts contributed to healthy year-over-year daily active usage growth of 11 percent and demonstrate why were investing in the long-term health of Twitter.
Looking ahead, Twitter guided for third-quarter earnings before interest, taxes, depreciation and amortization of between $215 million and $235 million. Twitter is now forecasting full-year capital expenditures of between $450 million and $500 million, up from its previous range of between $375 million and $450 million.
[See: The 10 Most Valuable Tech Companies in the World.]
Bank of America analyst Justin Post says TWTR stock is pricing in growth that simply isnt there.
While we agree that the clean-up efforts are a long-term positive for the platform, we still have concerns on Twitters reach and anticipate pressure on MAU growth as suspension headwinds continue, Post says.
Bank of America has an underperform rating and $27 price target for TWTR stock.
Love my kids and seeing pics of my grandson, but who has time?
Logical result of routinely banning a sizable minority of members AND their most interesting ones.
Why bother signing up for Tweets when it is a repeat of liberal mantras you get through every other medium?
Yep, I want to know who is dumping the stock.
I hope it’s institutional investors...................
The twitter one was hard for me to understand.
Users only hit 334 million vs a 335 million goal? Seriously?
(Those figures may be one point off or so, but I believe it was still a one point spread)
When the selfie craze dies out, I wonder what will happen to Instagram.
It already has. Rule #1 of Instagram is don’t post too many selfies.
You think your president has a weak mind?
PING!!!
I receive Donald J. Trump’s tweets, but today I am getting the same tweets that I have “liked” multiple times, something like 4 or 5 times. I wonder what’s up with that.
I’m wondering if Twitter is doing this so that people get tired of getting the same tweets over and over and stop following him.
..... and their growth stalled because their advertisers began to realize that they weren't getting all of the eyeballs they were paying for ....
..... same with facebook ....
If I was CEO of either company, I’d have my programmers create a sign-in / sign-up process that would eliminate ‘bots’.
It’s not difficult.....................
Twitter and Facebook are committing stock fraud and charging for ads to “people” that do not exist. The numbers they claim are way to high. They expect you to believe that more then a third of the worlds population has A) a computer B) signed up for Facebook and Twitter and C) are active accounts and not “bots” that the companies are using to commit fraud.
Google and others regularly commit ad fraud and have been caught. They then give back some (not all) of the stolen money.
https://www.cnbc.com/2017/07/21/google-oath-others-ad-fraud-widespread-problem.html
Google search results: As of the second quarter of 2018, Facebook had 2.23 billion monthly active users.
335 million for Twitter.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.