Twitter Inc (NYSE: TWTR) has had a volatile 2018 and is no stranger to earnings day volatility. Analysts are expecting another big quarter from Twitter when it reports second-quarter earnings on Friday morning, but the stock’s 84 percent year-to-date gain means it could be a bumpy ride.
Wall Street analysts are expecting Twitter to report second-quarter earnings per share of 17 cents, making it Twitter’s third consecutive profitable quarter. Consensus analyst estimates are are also predicting second-quarter revenue of $696.2 million, up 21.3 percent from a year ago.
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Investors will be paying particularly close attention to Twitter’s monthly active user count after the company said earlier this month is has been suspending more than 1 million fake accounts per day in its effort to clean up its platform and improve user experience. TWTR stock initially dipped following the reports on concerns that the suspensions would weigh on monthly active user numbers. However, the company later clarified that the majority of the suspended accounts are less than one month old or have been inactive for more than one month and have never been included in active user counts.
Last quarter, Twitter reported 336 million monthly active users, up 3 percent from a year ago. J.P. Morgan analyst Doug Anmuth says Twitter investors can expect just 2 million monthly active user additions in the second quarter.
“While TWTR confirmed it shut down 70 million accounts in May and June, these changes are beneficial to the overall health of the platform long term, and shouldn’t have much impact on reported MAUs in the near term,” Anmuth says.
Anmuth said Twitter’s daily active user (DAU) growth could be slightly more impressive.
“Our DAU growth projection of 13 percent is likely above overall expectations, and we model DAU/MAU reaching 50 percent in 2Q,” Anmuth says.
J.P. Morgan is predicting adjusted second-quarter EPS of just 14 cents, but above-consensus revenue of $714.10 million.
In the longer term, J.P. Morgan is calling for third-quarter revenue of $744 million, about 4 percent above consensus analyst estimates. For the full year, the firm is forecasting $3 billion in revenue (3 percent above consensus) and $1.17 billion in earnings before interest, taxes depreciation and amortization (6 percent above consensus).
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Over the past eight quarters, TWTR stock has averaged a 10 percent move on the day of its earnings report.
J.P. Morgan has an “overweight” rating and $50 price target for TWTR stock.
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Twitter Inc. Earnings: What To Expect From TWTR Stock originally appeared on usnews.com
