Did Twitter Repeat Its Strong Q1 Performance Again In Q2?

July 25th, 2019 by Trefis Team
45.08
Trefis
TWTR: Twitter logo
TWTR
Twitter

Twitter (NYSE:TWTR) is scheduled to reported its Q2 earnings on Friday, July 26. In Q1, the company handsomely beat consensus estimates across revenue and EPS – boosting its shares by 15% within hours of the upbeat earnings report. With the social media company seeing a steady increase in monetizable daily active users (mDAUs) over recent quarters, it has been able to attract some online advertising budgets from larger peer Facebook. This, in turn, could drive strong results for Q2. As a part of the Q2 results announcement, we will be looking for updates on platform health and additional user engagement initiatives.

Trefis estimates Twitter’s valuation to be $37 per share, which is slightly below the current market price. You can modify any of the key drivers to visualize the impact of changes on the company’s share price estimate. Additionally, you can see more Trefis technology company data here.

A Quick Look At Twitter’s Revenues

Relevant Articles
  1. Twitter Stock Gained 9% In One Week, Where Is It Headed?
  2. Twitter Stock Posted Weak Results In Q2, What To Expect Next?
  3. Company Of The Day: Twitter
  4. Company Of The Day: Twitter
  5. Is Twitter’s Stock Undervalued At The Current Price?
  6. What’s Next For Twitter’s Stock?

Facebook makes money from online advertising and from licensing of data. The company reported total revenues of $3 billion in 2018 and reported in two segments:

  • U.S. ($1.6 billion 2018 revenue, contributed 54% to total revenue): Segment revenue is derived from Twitter’s U.S. business.
  • International ($1.4 billion 2018 revenue, contributed 46% to total revenue): Segment revenue is derived from Twitter’s International business.

Twitter’s Operating Trends Over Recent Years, And Our Expectations For 2019

  • Twitter’s Revenues (shows key revenue components) reached $3.04 billion in 2018 from $2.53 billion in 2016. The change of $0.51 billion between 2016-18 implied an annualized rate of 9.7%. Q1 2019 revenue came in at $0.79 billion (18.4% y-o-y). We expect 2019 revenue to reach $3.32 billion (9% y-o-y).
    • U.S. Revenue has largely remained around $1.6 billion over recent years. We expect the figure to cross $1.7 billion in 2019.
    • International Revenue has grown by more than 20% annually over 2016-18. We expect growth rate to be almost 15% forr the year – helping these revenues reach $1.6 billion for full-year 2019.

Per Trefis estimates, Twitter’s EPS for full-year 2019 is expected to be $0.66. Taken together with a P/E multiple of 56x, we arrive at a fair value of $37 for Twitter’s stock (shows cash and valuation analysis), which is slightly below the current market price.

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own