Twitter Inc. (NYSE: TWTR) will report earnings this week. The troubled social media company needs to show that it has restarted user growth and that it has become more of a mainstream advertising platform. Absent one of these, shares are likely to sell off. The stock is up 14% in the past three months, well above the just less than 7% improvement in the Nasdaq.
Barron’s recently reported that Wall Street has voiced some optimism about earnings prospects:
Guggenheim analyst Michael Morris rates Twitter at Buy while Wedbush analyst Michael Pachter rates the company at Neutral. Both, however, expect it to meet or beat first-quarter estimates.
When Twitter announced its earnings in February, the number of users fell:
Average monthly active users (MAU) were 321 million for Q4, compared to 330 million in the same period of the previous year and compared to 326 million in the previous quarter.
What to watch for. This is Twitter’s own forecast for the current quarter:
Total revenue to be between $715 million and $775 million. GAAP operating income to be between $5 million and $35 million