Social Media Giants Twitter and Snap Report Earnings

Social media giants Twitter (Ticker Symbol: TWTRWealth Strength IndexTWTR is Extremely Flat and trending Up) and Snap Inc. (Ticker Symbol: SNAP)

reported earnings on Tuesday, kicking off earnings in the social media space.  Twitter released a monster earnings beat, reporting earnings per share of .37 cents compared to Wall Street estimates of .17 cents.  Twitter’s revenues came in at $787 million compared to analysts expectations of $776.1 million.  The monthly active users (MAU’s) rose to 330 million vs. the 318 million Wall Street was expecting.  It was a phenomenal quarter for Twitter and a monster beat on the top and bottom line, which sent the stock surging 15.6% after the news broke.

Twitter’s stock took off to a great start in 2018 rallying just under 100% return in the first two quarters.  The rally was led by two good earnings releases and a move by Twitter into the S&P 500 index.  Twitter put in an extremely overbought rating in its Relative Strength Index (Indicated by the purple circles on the chart) and began to consolidate at the top end of its range.  A very poor earnings release in the third quarter of 2018 sent the stock gapping lower, right through its 100-Day Moving Average.  The stock proceeded to grind lower before finding support at the $26.00 price level.  Twitter had a mediocre start to 2019, staying positive, but underperforming the overall market.  It finally made its way above its 100 and 200-Day Moving Averages again just before Tuesday’s monster earnings beat sending the stock gapping higher.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 28 analysts offering 12-month price targets, the average price target for Twitter’s stock is $38.96. According to that number, the stock is priced right in-line with Wall Street’s analysts’ average price targets and could be considered at value around current levels near $39.29.

Snap released earnings on Tuesday reporting that they have added 4 million users to the Snapchat app this quarter.  That was the first time the company grew its daily-active-users (DAU) count by a large margin in over a year.  The company also beat Wall Street analysts estimates on the top and bottom line.

Snap’s Initial Public Offering was March 2nd, 2017 with an opening price of $17.00.  After a run of bad earnings reports, the stock began a steep downtrend in 2018 pulling back over 75% from its 2018 highs.  In the fourth quarter of that same year, the stock found a temporary bottom while forming a bullish divergence indicated by the purple circles on the chart. (Lower low in price, and a higher high in the Relative Strength Index)

In the first quarter of 2019, Snap broke out above its current downtrend and shortly after it reclaimed and traded above its 100-Day Moving Average.  After a positive earnings beat and guidance, the stock rallied back above its 200-Day Moving Average.  Snap has been on a much-needed rally so far in 2019, rallying over 90% since the start of the year.

(Chart above courtesy of ​www.tipranks.com​)

Based on a survey of 26 analysts offering 12-month price targets, the average price target for Snap’s stock is $11.49. According to that number, the stock is priced right in-line with Wall Street’s analysts’ average price targets and could be considered at value around current levels near $11.36.

Twitter and Snap both seem to have been doing something right last quarter.  It has been a long time in the works and both stocks have had a past of struggling to make solid profits.  It seems as if both companies are beginning to turn the corner for the better. The social media space is having a very solid start to the beginning of 2019.

 

 


Wealth365, Inc. wants to ensure you understand that trading and investments have large potential rewards, but also large potential risk. Wealth365 contributors and staff writers may have previously had, currently have, or plan to add securities they write about as a part of their trading or investment portfolio. Trading and investment strategies mentioned in Wealth365 videos or articles may not be suitable for you and you should make your own independent decision regarding them.This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You should strongly consider seeking advice from your own investment advisor. Review our full terms of use and additional risk disclosures here.