Social media giant Twitter impressed the Wall Street community by posting better than expected revenue reports, reaching a 6% stock price growth in the extended trading session on Thursday. In Q1 total revenue had a growth of 74% from the previous year, and it settled at $1.19B versus the lower estimates of $1.06B.
Adjusted earnings per share were up 45.5% to $0,20, beating Analyst estimates of only $0,07. The social network’s average monetizable daily active usage or mDAU increased 10.8% yearly to 206 million. Costs and expenses for that matter, grew 21% year over year to $1.16B, meanwhile, stock-based compensation expense was $178M, an increase of 34%.
Twitter’s CEO Jack Dorsey commented, “As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent.” Mr. Dorsey added, “We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and medium-sized businesses.”
For Q3, total revenue is expected to be from $1.22 billion to $1.3 billion surpassing analysts’ estimates of $1.17 billion.
Following second-quarter earnings results, analyst Colin Sebastian maintained a Hold rating on the stock with a price forecast of $75 meaning a 7.8% upside potential. Mr. Sebastian commented, “We are impressed with the stronger-than-expected monetization metrics in Twitter’s Q2 results (mDAUs were in-line), and suggest that improvements to the company’s revenue-generating products are paying off, also helped by a robust demand environment for digital ads.”
The rest of the Wall Street community is optimistic, but cautious, about the stock with a Moderate Buy rating. The average TWTR price forecast of $67.95 means a 2.3% downside from current levels. However, Twitter stock has increased 81% on a yearly basis.
How do you expect this social media giant to behave in the following year? Is it a buy? Let us know what you think!
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