Twitter Q1 Earnings and Revenue to Rise 27%; Target Price $75

Twitter, an online social media company that enables users to send and read short 140-character messages called “tweets”, is expected to report its first-quarter earnings of $0.14 per share, which represents year-over-year growth of over 27% from $0.11 per share seen in the same quarter a year ago.

The San Francisco, California-based company would post revenue growth of 27% for the quarter ended March 2021.

“We expect solid 1Q21 results, key focus areas at the print will include (i) DAU growth trends, which decelerated slightly to +27% y/y in 4Q; (ii) Top-line trends, including commentary on Direct Response ads/results of the newly re-launched MAP product. We raised ’21-’26 revenue and EBITDA following the bullish multi-year guide at Twitter’s (TWTR) analyst day, price target to $68 from $58, maintain Market Perform,” noted John Blackledge, equity analyst at Cowen.

“We estimate total revenue of $1.03BN for 1Q21, +27.9% y/y, vs. guidance of $940MM-$1.04BN, and ~1% above consensus. We forecast TWTR’s reported ad revenue to grow 31.5% y/y 1Q21 vs. reported growth of +0.4% y/y in 1Q20 and 30.5% growth in 4Q20; our forecast comprises a ~30.8% US adv. growth, slightly below our est. for ~32.4% growth in Int’l adv.”

Twitter shares rose about 23% so far this year. At the time of writing, the stock was trading 1.40% lower at $66.08 on Monday.

Twitter Stock Price Forecast

Thirty-four analysts who offered stock ratings for Twitter in the last three months forecast the average price in 12 months of $75.78 with a high forecast of $112.00 and a low forecast of $52.00.

The average price target represents a 14.51% increase from the last price of $66.18. Of those 34 analysts, 14 rated “Buy”, 19 rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $68 with a high of $91 under a bull scenario and $52 under the worst-case scenario. The firm gave an “Equal-weight” rating on the social media company’s stock.

“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for TWTR given 1) continued turnaround progress and 2) platform scarcity,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”

Several other analysts have also updated their stock outlook. Twitter had its price objective raised by Argus to $82 from $72. The brokerage currently has a buy rating on the social networking company’s stock. Truist upgraded Twitter from a hold rating to a buy rating and increased their price objective to $74 from $64.

Moreover, BMO Capital Markets raised their price target to $75 from $45 and gave the stock a market performance rating. Susquehanna raised their price target to $70 from $58 and gave the stock a positive rating. Susquehanna Bancshares raised their price target to $70 from $58 and gave the stock a positive rating.

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