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Spooked Investors

Stock (Symbol) Stock Price

Twitter (TWTR)

$31

Data is as of Expected to Report Sector

August 3, 2015

Oct 26 – Oct 30

Technology

Sharek’s Take
David SharekTwitter had solid numbers last qtr — and the stock initially rose after results came out — but company management stated it doesn’t foresee much user growth during a negative conference call and the stock is falling as the sentiment has turned negative. Profit growth was 250% last qtr as sales rose 60%, both good, but profit estimates haven’t grown in two straight qtrs, and that’s not enough to keep the stock up considering the P/E is 91 (48x next year’s earnings estimates, which isn’t bad). I will sell TWTR from the Growth Portfolio and Aggressive Growth Portfolio today, as the stock has now broken below $30.
One-Year Chart
TWTR_2015_Q3Bad breakdown 2QtrsAgo but the stock got support above $35. This recent move lower is worse, and puts TWTR into a free-fall. Nice Est LTG though so I’ll keep the stock on my radar.
Earnings Table
TWTR_2015_Q3_EPSAs mentioned earlier sales rose 60% and profits increased 250%.
 
TWTR beat by 3 cents and actually rose in after hours trading just after this announcement, then it turned lower during the conference call.
 
Annual Profit Estimates
stayed about the same.
 
Quarterly estimates look good, too bad the stock’s in a free-fall.
Fair Value
TWTR_2015_Q3_PHTWTR is expensive when you look at this year’s profit estimates, but the company is rapidly growing so this can be overlooked. But the negative sentiment is overcoming the stock, sending it lower.
Ten-Year Chart
TWTR_2015_Q3_10yrTwitter’s ten-year chart looks terrible. Nice profit growth though.
Power Ranking Bottom Line
Growth Portfolio

N/A

Twitter’s negative conference call has spooked investors, even though the earnings table still looks good. At this point the stock is trending down and with no bottom in sight.
 
TWTR will be sold from the Growth Portfolio and Aggressive Growth Portfolio today.

Aggressive Growth Portfolio

N/A

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