Twitter share price awaiting cues from upcoming Q1 earnings
On the back of improving ad spending environment, can Twitter’s Q1 results this week outperform market expectations?
When does Twitter report earnings?
Twitter is set to release its Q1 financial results on 29 April, after market close.
Twitter earnings – What to expect
Advertising services account for close to 90% of Twitter’s revenue, which saw a dip in 1H 2020 as businesses cut back on marketing spend in times of Covid-19. However, investors may note that on the back of improving economic conditions, advertising revenue had bounced back strongly in the later part of the year to the point of surpassing pre-Covid levels. This momentum may potentially continue into 2021, as global advertising spend are projected to increase further with improved business sentiments from ongoing vaccination and economic recovery.
That said, investors may keep a close watch for Twitter’s daily active users (DAUs) base after the figure missed expectations for the previous quarter. After a strong surge in Q2 2020, growth of DAUs seems to taper off as reopening and normalisation takes place. Twitter guided for DAU growth of approximately 20% YoY for the upcoming Q1 results. One to watch.
How to trade Twitter earnings
Twitter’s current forward P/E ratio stands at 65.1, commanding a premium over the technology sector average of 46.4. Its relatively high valuation may suggest that a high bar is set for outperformance in the upcoming Q1 results. Markets may be on the lookout for its user base growth and average revenue per user (ARPU), as key gauges for its growth momentum in times of ongoing normalisation.
Currently, the stock has 11 ‘buy’ recommendations, 24 ‘holds’ and five ‘sells’. The Bloomberg 12-month consensus target price of US$72.00 suggests a potential 7.9% upside from current price.
Twitter shares – technical analysis
Twitter’s price movement seems to be forming an inverse head and shoulders pattern after retracing from its all-time high of US$80.75 in February. Should prices continue to trend upwards in the near term, it may potentially find resistance at the neckline level of US$74.00. One to watch. Key support in the near term may be the US$64.00 level where prices remain supported on three occasions previously, followed by the US$60.00 psychological level.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
