| Stock (Symbol) | Stock Price | |
Twitter (TWTR) |
$37 |
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| Data is as of | Expected to Report | Sector |
May 8, 2015 |
Jul 27 – Jul 31 |
Technology |
| Sharek’s Take | ||
 Twitter dropped from $52 to $38 in the two days after it reported earnings last qtr because revenue of $436 million was $20 million short of analyst estimates. Sales still rose 82% and profits jumped to 7 cents from 0 cents a year ago, and beat the street by 3 cents. I thought this sales miss by TWTR was going to send estimates down, but they didn’t drop too much. 2015’s profit estimate dropped from $0.38 to $0.34 — just 4 cents. It’s important to keep the big picture in mind with Twitter. The company will grow and evolve in the coming years and I think its important to own the stock just in case it reaches for the skies. The company also owns the 6-second video site Vine, and it’s getting 1.5 billion video views per day. My 2015 Fair Value on TWTR is $26, 2016’s is $50, and the stock’s in between that number now. |
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| One-Year Chart | ||
 One good thing is the stock’s P/E just fell from 126 to 110. It’s important to keep in mind this company is on track to make $1 in 2017, so $37 for the stock isn’t bad when that’s considered. Profit growth still growing at a triple-digit rate, so the stock’s still timely. |
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| Earnings Table | ||
 Revenue growth slowed from 97% 2QtrsAgo to 82% last qtr. Profits of 7 cents were down from 12 cents 2QtrsAgo.Although revenue came in $20 million under projections, profits of 7 cents per share beat estimates by 3 cents. Annual Profit Estimates for 2015 are around what they have been the prior three qtrs. 2016’s estimate just got slashed from $0.80 to $0.67. Quarterly estimates show triple-digit profit growth might end three qtrs from now. |
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| Fair Value | ||
 As mentioned earlier, this $37 stock is half way between my 2015 and 2016 price targets. Perhaps TWTR is working its way towards $50. |
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| Ten-Year Chart | ||
 Twitter has had a wild trading history. Some of that’s due to hype surrounding the stock when it went public. Still, the annual profit history looks good and the company is expected to have profits go to $0.67 in 2016 and $1.15 in 2017. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
10 of 23 |
Twitter’s sales miss is a big deal from the short-term view, but long-term this is stock an excellent franchise to own. Management will figure out new technology and more efficient ways to advertise and we can only imagine what lies ahead. Hold this stock for the long-term, if you don’t then take advantage of the lower price to buy in now. |
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Aggressive Growth Portfolio
8 of 8 |
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