Is Twitter’s Stock Undervalued At The Current Price?

+17.38%
Upside
38.23
Market
44.87
Trefis
TWTR: Twitter logo
TWTR
Twitter

Twitter’s stock (NYSE: TWTR) has fallen by 50% in the last twelve months due to various factors like lower user growth than market expectations, a new CEO, and earnings falling short of consensus estimates. In recently announced FY 2021 results, the company posted revenue of $5.08 billion, up by 37%, but an operating loss was recorded at $493 million, which includes a one-time litigation-related net charge of $766 million and ongoing investments

The share price has fallen rapidly in 2022 similar to all growth stocks, as U.S. Federal Reserve Chair Jerome Powell hinted that an increase in interest rates will be sooner rather than later, which has shifted investors toward safer assets. Though the increase expected is lower now than before the war broke out between Russia and Ukraine last week.  

Overall, we expect Twitter to continue to add new users and improve Twitter‘s revenues to $5.6 billion in FY 2022 while net income is expected to be $73 million. We expect the revenue per share (RPS) to be $6.97 which coupled with the P/S multiple of 6.4x will lead to Twitter’s valuation of $45, about 28% upside compared to the current market price.

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Here you’ll find our previous coverage of Twitter stock, where you can track our view over time.

Check out how Twitter Peers fare on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Mar 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 TWTR Return 0% -18% 118%
 S&P 500 Return 0% -8% 96%
 Trefis MS Portfolio Return 0% -10% 254%

[1] Month-to-date and year-to-date as of 3/1/2022
[2] Cumulative total returns since the end of 2016

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