What to Watch For in Twitter's Report Thursday

Chris Lange

Twitter Inc. (NYSE: TWTR) is set to report its most recent quarterly results before the markets open on Thursday. The consensus estimates from Thomson Reuters call for $0.25 in earnings per share (EPS) and $869.5 million in revenue, which would be an improvement over the $0.19 per share and $731.56 million reported in the fourth quarter of last year.

During the most recent quarter, infamous short firm Citron called Twitter the “Harvey Weinstein of Social Media” in a report.

Citron believes that while Wall Street has been focused on Facebook, Twitter poses more problems. The firm believes that Twitter has become uninvestable and advertisers will soon be forced to take a hard look at all sponsorships with Twitter.

This view is based on a recent report from Amnesty International that concluded Twitter is an abuser of human rights and has become a place that is “toxic” for women, noting that women are abused every 30 seconds on the platform. The study focused on 800 female journalists and politicians to show the culture of hate that underpins Twitter.

According to Citron:

As an investor, if you dislike Facebook you must absolutely HATE Twitter. Beyond the recent findings of Amnesty International, Twitter is subject to the same concerns over privacy regulation.

Remember, Twitter has a business segment dedicated to selling user data. Last quarter, Twitter generated $108 million from data licensing of their users. If you assume 100% margin on Twitter’s data licensing business, this segment alone accounts for almost 80% of total profits!

Overall, Twitter has outperformed the broad markets, with the stock up over 19% year to date. In the past 52 weeks, the stock is up about 33%.

A few analysts weighed in on Twitter ahead of the report:

  • Vertical Group has a Buy rating.
  • JPMorgan has a Buy rating and a $44 price target.
  • Merrill Lynch has a Buy rating with a $39 price target.
  • Guggenheim has a Buy rating with a $39 target price.
  • Aegis has a Buy rating with a $41 price target.
  • CIBC’s Outperform rating comes with a $37 target.

Shares of Twitter were last seen at $34.16, in a 52-week range of $25.76 to $47.79. The stock has a consensus analyst price target of $34.54.