As we gear up for Q3 earnings in the upcoming weeks, TWTR has had an impressive run-up since their last print. Yet, it seems the looming question ahead of earnings is focused on the longevity of TWTR’s growth story. Will TWTR be able to maintain this growth for the long-term? Or will their growth story be short-lived?
With that being said, we remain cautious at these levels given the recent weakness we have uncovered in TWTR’s July and potentially August ad rev numbers. Here are some key takeaways from our most recent analysis of TWTR:
- In our panel we have seen companies experience material drop-offs before; however, these decelerations attend to be over time. In the case of TWTR’s Q3 performance, their quick drop-off is what we would like to bring to investors’ attention.
- Our data historically has a proven track record that correlates against TWTR’s print, and our most recent results show a decline in July and our August numbers look intriguing.
- We would like to highlight this since there could be an opportunity to trim or create a short thesis at these rich valuation levels. TWTR’s valuation at this level is only supportive if growth continues at the same rate.
- We believe investors will consider undervalued companies in this space (ie. FB, SNAP & PINS) which all show attractive growth rates in our Q3 data.
This is an early read on our outlook for TWTR and may be subject to change once we officially drop our August numbers on September 19th.
If you are an investment manager who follows or is interested in TWTR, feel free to reach out to SMI to coordinate a call on our latest results.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: SMI’s data comes from US media agencies and this data accounts for monthly reconciliations, client movement, and data cleanses.