Investors certainly have strong reactions to Twitter’s quarterly updates. Back in February the stock plunged 12% in a single session following its Q4 results, and for good reason. While earnings per share beat estimates by 4 cents at 16 cents and monthly active users rose 4%, a major miss in revenue, at $717 million against the $740.1 million expected, was all that mattered in the eyes of the market.
This update hung like a dark cloud over the stock, eventually leading Twitter to a 10 month low of $14.13 in mid-April. Yet its first quarter statement at the end of that month led to quite the remarkable comeback. In a reversal of the post-Q4 reaction, the fact that revenue dropped 8% to $548 million – the first time it has seen a quarterly year-on-year decline since it floated 4 years ago – was outweighed by a better than forecast 6% jump in monthly active users to 328 million.
In the 5 sessions that followed, Twitter surged 27%, listing the stock back towards $19. A bit of a wobble across May and June kept it between $17 and $18.50, only for it to surge to a 9 month high of $20.88 on 20th July.
Just 7 days later, however, and the social media giant suffered its most recent 2017 plot twist: its Q2 earnings release. Investors were not impressed, immediately sending the stock 15% lower as it revealed it an unchanged 328 million monthly active users (MAU), a million short of forecasts. Elsewhere the figures were solid, with earnings of 12 cents per share and revenue of $574 million (which surpassed the $536.7 million forecast but still means it fell 5% year-on-year).
Having hit $16 in the aftermath of that MAU miss, the stock has begun to recover, though it hasn’t been without bumps in the road. Twitter Inc (NYSE:TWTR) now sits at a current trading price of $17.87.
So, what’s in store on Thursday? Well, Twitter have already stated, back in their Q2 letter to investors, that it does ‘not expect to see [its] total revenue growth rate improve in the second half of 2017’. That heaps more pressure on sequential monthly active user growth, even if the company has urged investors to focus more on the year-on-year comparisons.
Twitter Inc has a consensus rating of ‘Hold’ with an average target price of $15.27.
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