fbpx

Good, Bad and Ugly

Here’s my first look at Twitter (TWTR) stock. I can sum up my view on the stock with the good, the bad and the ugly. The company grew revenue 119% last quarter, that’s good. What’s bad is the company didn’t make a penny per share in profits off all that. Then the stock’s in a steep decline, and that makes the chart look ugly.

One Year Chart

TWTR_2014_Q2I think what hurt TWTR the most was the company made a profit of $0.02 a share 2QtrsAgo, then made $0.00 last quarter. I bet a lot of people got aboard thinking profits would continue to climb. Then when TWTR delivered a N/A investors jumped ship.

TWTR has a P/E of 977. It’s expected to make a profit of 4 cents per share this year, a quarter next year.

Fair Value

TWTR_2014_Q2_FVUsing a P/E of 75, TWTR seems to be worth $19 next year. But we don’t have a good indication of what TWTR really can make, so this is really just a shot in the dark.

Sharek’s Take

I’m not that interested in buying Twitter stock. I just wanted to do my research on it, so that if it does fit the mold someday I can see when its a good time to buy. Facebook was also overvalued when it first came out, and when it was time to get in FB it was easy to see from the charts.

View the Earnings Table here.
View the Profit History here.
View the Ten Year Chart here.

Leave a Comment

Your email address will not be published. Required fields are marked *

Not a member? Sign up here for $25 a month.