Some Major Takeaways From Twitter Inc (TWTR)’s Results


Twitter Inc (NYSE:TWTR) declared its second-quarter results yesterday after market hours, beating analysts’ expectations on all metrics. The company posted revenue of $312 million, up 124% from last year. The adjusted earnings per share came at $0.02, compared to last year’s negative adjusted EPS of $0.24. The most important number that the Street was looking for was Twitter Inc (NYSE:TWTR)’s monthly active users, which came at 271 million, much above expectations.

Twitter, is Twitter a good stock to buy, Q2 2014, Debra Aho Williamson, Paul Sweeney

The major takeaway from Twitter Inc (NYSE:TWTR) results were discussed by Bob Peck, managing director at Suntrust Robinson Humphrey on CNBC.

“Five major takes away from the quarter, it’s all under the theme of acceleration, so MAU’s peaked, and there was a lot of concern going into the quarter, they are going to miss and miss greatly but U.S. particularly accelerated 21% growth, [….] and number three, ad revenues accelerated to almost 130% growth and number four speed hid on, in I think is huge is Mobile the data revenues you saw big acceleration to 90% growth and that’s coming from mobile, that’s big and lastly number five, Incremental margins here accelerated to 28% versus last reported quarter of 17%,” Peck said.

Mr. Peck believes that the second quarter results carry some very good sign for Twitter Inc (NYSE:TWTR). Suntrust Robinson Humphrey had a price target of $45 on Twitter Inc (NYSE:TWTR) with a ‘Buy’ rating, which it surpassed in after hours trading, reaching levels of $50.

“[…] I mean it just moved 30% in a couple of minutes. So, what we’ll do is that we’ll take the numbers, we’ll flow them through our models and as you know, we do on all our stocks, we take a look at EBIT revenues to growth […] We like them both, but they are very different though, because Twitter Inc (NYSE:TWTR) is very expensive versus a Facebook, so you are paying about 15 times EBIDTA for Facebook and about 60 times for Twitter Inc (NYSE:TWTR), so you have to growth-adjust those numbers and take a look from there,” Peck added.

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