Twitter (NYSE:TWTR) - Share price, News & Analysis

Q: What is the Fair Price of TWTR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TWTR ($38.23) is trading below our estimate of [[fair value]] ($77.52)

TWTR fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	2/6
Financial Health	4/6
Dividends	0/6

TWTR Stock Overview

Twitter, Inc. operates as a platform for public self-expression and conversation in real-time.

Rewards

Trading at 50.7% below our estimate of its fair value

Earnings are forecast to grow 17.93% per year

Became profitable this year

Risk Analysis

Large one-off items impacting financial results

Significant insider selling over the past 3 months

Twitter Competitors

Weibo

NasdaqGS:WB

US$5.7b

Alphabet

NasdaqGS:GOOGL

US$1.4t

Meta Platforms

NasdaqGS:META

US$447.5b

NYSE:PINS

US$12.4b

Price History & Performance

Summary of all time highs, changes and price drops for Twitter
Historical stock prices
Current Share Price	US$38.23
52 Week High	US$73.34
52 Week Low	US$31.30
Beta	0.58
1 Month Change	-4.81%
3 Month Change	-25.01%
1 Year Change	-44.75%
3 Year Change	4.88%
5 Year Change	111.45%
Change since IPO	-14.86%

Recent News & Updates

Jun 22

Can Twitter Stock Rebound To $50?

Twitter has been in the news recently, but for all the wrong reasons. Fake news and political mayhem resulted in President Trump being banned from the platform. Jack Dorsey, the man who conceptualized Twitter and twice served as its CEO dramatically quit and left the company. The share price collapsed and is currently trading below its 2013 IPO price, despite a top line CAGR of 29% over that period. Elon Musk has acquired a 10% stake and is attempting a take-over. But what is really going on? Is Twitter a good investment opportunity? We’ll answer all of these questions and more.

Jun 14

Arb's Golden Age: Elon Musk And Twitter

Time to put money to work. Merger arb spreads are wide. Here’s what you can buy today.

Jun 06

Twitter: Watch The Circus From The Sidelines

Elon Musk is having second thoughts about buying Twitter given an alleged lack of transparency in the number of spam/fake accounts on the platform. Twitter's stock has given up all its gains since Musk's initial disclosure of a 9.2% stake in the company. Shares remain vulnerable to headlines and speculation, making a case for staying on the sidelines amidst shaky fundamentals.

Shareholder Returns

	TWTR	US Interactive Media and Services	US Market
7D	-2.5%	-5.8%	-2.2%
1Y	-44.8%	-33.0%	-19.1%

Return vs Industry: TWTR exceeded the US Interactive Media and Services industry which returned -48.7% over the past year.

Return vs Market: TWTR underperformed the US Market which returned -21.2% over the past year.

Price Volatility

Is TWTR's price volatile compared to industry and market?
TWTR volatility
TWTR Average Weekly Movement	7.2%
Interactive Media and Services Industry Average Movement	11.1%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.3%

Stable Share Price: TWTR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: TWTR's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	7,500	Parag Agrawal	https://www.twitter.com

Twitter, Inc. operates as a platform for public self-expression and conversation in real-time. The company’s primary product is Twitter, a platform that allows users to consume, create, distribute, and discover content. It also provides promoted products that enable advertisers to promote brands, products, and services, as well as enable advertisers to target an audience based on various factors, including who an account follows and actions taken on its platform, such as Tweets created and engagement with Tweets.

Twitter Fundamentals Summary

How do Twitter's earnings and revenue compare to its market cap?
TWTR fundamental statistics
Market Cap	US$29.17b
Earnings (TTM)	US$223.87m
Revenue (TTM)	US$5.24b

130.3x

P/E Ratio

5.6x

P/S Ratio

Is TWTR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TWTR income statement (TTM)
Revenue	US$5.24b
Cost of Revenue	US$1.92b
Gross Profit	US$3.32b
Other Expenses	US$3.09b
Earnings	US$223.87m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.29
Gross Margin	63.30%
Net Profit Margin	4.27%
Debt/Equity Ratio	88.8%

How did TWTR perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is TWTR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TWTR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TWTR. This is calculated by dividing TWTR's market cap by their current preferred multiple.
What is TWTR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$29.17b

TWTR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.6x
Enterprise Value/EBITDA	54x
PEG Ratio	7.3x

Price to Earnings Ratio vs Peers

How does TWTR's PE Ratio compare to its peers?

TWTR PE Ratio vs Peers

The above table shows the PE ratio for TWTR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.7x
WB Weibo	18.4x	22.5%	US$5.7b
GOOGL Alphabet	19.2x	14.2%	US$1.4t
META Meta Platforms	12x	13.6%	US$447.5b
PINS Pinterest	37.3x	28.5%	US$12.4b
TWTR Twitter	130.3x	17.9%	US$29.2b

Forward PE

Price-To-Earnings vs Peers: TWTR is expensive based on its Price-To-Earnings Ratio (130.3x) compared to the peer average (21.7x).

Price to Earnings Ratio vs Industry

How does TWTR's PE Ratio compare vs other companies in the US Interactive Media and Services Industry?

Price-To-Earnings vs Industry: TWTR is expensive based on its Price-To-Earnings Ratio (130.3x) compared to the US Interactive Media and Services industry average (40.8x)

Price to Earnings Ratio vs Fair Ratio

What is TWTR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TWTR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	130.3x
Fair PE Ratio	29.2x

Price-To-Earnings vs Fair Ratio: TWTR is expensive based on its Price-To-Earnings Ratio (130.3x) compared to the estimated Fair Price-To-Earnings Ratio (29.2x).

Share Price vs Fair Value

What is the Fair Price of TWTR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TWTR ($38.23) is trading below our estimate of fair value ($77.52)

Significantly Below Fair Value: TWTR is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: TWTR is poor value based on its PEG Ratio (7.3x)

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Future Growth

How is Twitter forecast to perform in the next 1 to 3 years based on estimates from 39 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

17.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TWTR's forecast earnings growth (17.9% per year) is above the savings rate (1.9%).

Earnings vs Market: TWTR's earnings (17.9% per year) are forecast to grow faster than the US market (13.6% per year).

High Growth Earnings: TWTR's earnings are forecast to grow, but not significantly.

Revenue vs Market: TWTR's revenue (16.2% per year) is forecast to grow faster than the US market (8.2% per year).

High Growth Revenue: TWTR's revenue (16.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: TWTR's Return on Equity is forecast to be low in 3 years time (10.5%).

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Past Performance

How has Twitter performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-10.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TWTR has a large one-off gain of $306.4M impacting its March 31 2022 financial results.

Growing Profit Margin: TWTR became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: TWTR has become profitable over the past 5 years, growing earnings by -10.7% per year.

Accelerating Growth: TWTR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TWTR has become profitable in the last year, making it difficult to compare its past year earnings growth to the Interactive Media and Services industry (-37.6%).

Return on Equity

High ROE: TWTR's Return on Equity (3.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Twitter's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: TWTR's short term assets ($7.5B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: TWTR's short term assets ($7.5B) exceed its long term liabilities ($6.5B).

Debt to Equity History and Analysis

Debt Level: TWTR has more cash than its total debt.

Reducing Debt: TWTR's debt to equity ratio has increased from 33.3% to 88.8% over the past 5 years.

Debt Coverage: TWTR's debt is not well covered by operating cash flow (7%).

Interest Coverage: TWTR's interest payments on its debt are well covered by EBIT (4.5x coverage).

Balance Sheet

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Dividend

What is Twitter current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate TWTR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TWTR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TWTR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TWTR's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as TWTR has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.5yrs

Average management tenure

CEO

Parag Agrawal (37 yo)

0.67

Tenure

US$30,351,222

Compensation

Mr. Parag Agrawal has been the Chief Executive Officer of Twitter, Inc. since November 29, 2021. Mr. Agrawal served as the Chief Technology Officer of Twitter, Inc. from October 2017 to November 2021. As C...

CEO Compensation Analysis

Compensation vs Market: Parag's total compensation ($USD30.35M) is above average for companies of similar size in the US market ($USD13.34M).

Compensation vs Earnings: Insufficient data to compare Parag's compensation with company performance.

Leadership Team

Experienced Management: TWTR's management team is seasoned and experienced (6.5 years average tenure).

Board Members

Experienced Board: TWTR's board of directors are considered experienced (4.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: TWTR insiders have bought and sold the same number of shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31