Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)

Email this Article

Send with mail | ahoo instead.
Required Needs to be a valid email
Required Needs to be a valid email
Why Twitter Stock Is Lagging Its Tech Rivals
https://moneymorning.com/?p=1179563
Required Please enter the correct value.
Twitter
Stocks: FB, TWTR

Why Twitter Stock Is Lagging Its Tech Rivals

By Money Morning Staff Reports, Money Morning • May 4, 2021

Start the conversation

Comment on This Story Click here to cancel reply.

Or to contact Money Morning Customer Service, click here.

Your email address will not be published.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

Some HTML is OK

Twitter Inc. (NASDAQ: TWTR) reported earnings last week, and the market has been less than enthusiastic about the results. The stock is down almost 20% with analysts lukewarm about the numbers and guidance from the company.

Twitter stock is one of the few social media and tech stocks that is struggling recently. You notice this more easily when comparing Twitter to other social media companies like Facebook Inc. (NASDAQ: FB) having a monster year.

Facebook popped 7% after its 2021 earnings report.

However, remember that Mr. Market likes to exaggerate these kinds of differences.

Here is why Twitter stock is really lagging behind Big Tech - and what to expect from the stock later in the year.

Insider Info on Twitter Stock

If you want to know how a company is really doing, it's best to get it straight from the horse's mouth.

CFO Ned Sega said during an interview that he expects earnings to grow at a single-digit pace for the rest of the year. Sega also suggested that the weakest quarter would be Q2, with revenue flat compared to Q1.

Sorry; this signup opportunity has ended.

The ongoing hiring binge would lead to an increase in compensation costs of as much as 25% in 2020.

Analysts have compared the report to blowout quarters from other social media companies so far this year. Twitter has not gotten the advertising growth and increase in users that Facebook Inc. (NADSAQ: FB) and other Big Tech platforms have seen in 2021.

The report was not horrific by any stretch of the imagination. Revenue had increased by 21% year over year, and ad revenue was up 32%. While that was above the consensus estimate, management's guidance for the rest of the year scared off investors.

The market is currently paying for roses and sunshine, not weak growth.

Twitter shares are down because, like most social media stocks, the shares were priced for perfection before the earnings report. When your stock is trading at 50 times what analysts are hoping you will make next year and 14 times sales, you do not have the luxury of reporting anything less than perfection.

At that valuation, beating the analyst's estimates for profits and revenue growth is the minimum expectation. Investors and traders buying in at that price expect to hear upbeat forecasts and increasing guidance. Anything short of perfection will lead to aggressive selling, and that is what happened to Twitter last week.

The report was not bad. It just wasn't perfect.

But is that enough reason to buy Twitter stock on a dip?

You'll find varying opinions on this. Here is what we think.

Should You Buy Twitter Stock on the Dip?

One of the bright spots for Twitter is the success of its audio product, Spaces. Since Spaces was rolled out recently to any Twitter user with more than 600 followers, downloads of its largest competitor, Clubhouse, have declined substantially.

BEST STOCKS FOR 2021

Wall Street insider Shah Gilani reveals the names of 5 obscure stocks that could dominate 2021 in this free video.

Watch Now

BEST STOCKS FOR 2021

Wall Street insider Shah Gilani reveals the names of 5 obscure stocks that could dominate 2021 in this free video.

Watch Now

Spaces has also rolled out its android product before Clubhouse, which remains available on just Apple Inc. (NASDAQ: AAPL) operating systems.

Elliott Investment Management is said to be buying the stock on the recent dip. The firm has a seat on the Twitter board and had accumulated a stake reported to be worth about $1.6 billion.

The rumors floating around Wall Street this week say the firm, headed by billionaire activist Paul Singer, has bought as much as $200 million on the dip and was still buying this week.

Should we follow Mr. Singer's lead and begin buying Twitter at these levels?

Probably not right now, if you are a long-term investor. Since the Fed opened the fiscal spigots last year, social media and tech stocks have been a momentum trade. With last week's selling, momentum appears to have turned negative.

Twitter is still priced for near perfection, and there are way too many questions about user growth and monetization of the user base to justify the current valuation.

Aggressive traders could consider making a bet that Twitter will bounce off the 200-day moving average at around $51.70 and bounces toward $65 to fill the gap. Use a very tight stop as a break below the 200-day could attract a wave of additional selling.

The Digital Gold Rush of the 21st Century

Our resident Silicon Valley insider is recommending three under-the-radar digital coins as today's BEST crypto buys.

They're much smaller and more affordable than Bitcoin, with up to 10X the growth potential as Dogecoin in the coming years.

One is trading for around $12, and predictions suggest that by the end of this year, the price could sit at $88.56 - a 638% profit.

To learn about all three - and discover how even a small stake could transform into a small fortune in 2021 - click here.

Follow Money Morning on Facebook and Twitter.

Join the conversation. Click here to jump to comments…

Login
guest
guest
0 Comments
Inline Feedbacks
View all comments
LIVE
Visit Money Morning Live


Latest News

January 19, 2023 • By Money Morning Stock Research Team

These Stocks Could Go To $0

January 9, 2023 • By Money Morning Stock Research Team

The Government Is Pouring $391 Billion Into These Stocks - Buy Now

December 27, 2022 • By Money Morning Staff Reports

6 IPOs in 2023 You Can’t Afford to Miss
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Profit Takeover This Is VWAP Penny Hawk Trading Today Midday Momentum Pump Up the Close
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Night Trader Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Extreme Profit Hunters Profit Revolution Warlock's World Penny Nation Quantum Data Profits Live Trading Alliance Trade The Close Inside Money Trader Expiration Trader Vega Burst Trader Flashpoint Trader Darknet Hyper Momentum Trader

Ā© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell My Info

wpDiscuz