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Twitter Earnings Preview: What Wall Street's Saying

NEW YORK (TheStreet) –– Twitter (TWTR - Get Report) reports its second-quarter earnings after the bell, and investors are watching several metrics closely, especially user growth.

Twitter shares have fallen 8% in the last three months and 40% year-to-date, with investors wary that the social network’s user base isn’t growing fast enough. Last quarter, Twitter reported 255 million monthly active users, well below rival Facebook’s (FB) 1.3 billion during the same period.

User engagement has slipped: in the first quarter, Twitter saw 157 billion timeline views, down from 158 billion in the third quarter of 2013 despite adding 23 million users to the platform. The company has tried to convince investors that it still has strong growth prospects, notably by engaging users and advertisers during this year’s FIFA World Cup, during which the company set several new tweet records.

Twitter has made several changes in the past quarter. Earlier this month, Twitter acquired CardSpring, a payments startup, to aid Twitter’s growing e-commerce business. Twitter is reportedly testing a “Buy Now” button for mobile users as well. The hiring of ex-Goldman Sachs (GS) banker Anthony Noto as Chief Financial Officer and former Google (GOOG) executive Katie Stanton as vice president of global media may also soothe worried investors.

Facebook’s strong quarter also will be on the minds of investors. Analysts expected earnings of 32 cents per share on $2.81 billion in revenue. Led by strong mobile advertising revenues, Facebook earned 42 cents per share on $2.91 billion in revenue. Advertising revenue grew 67% year-over-year to $2.68 billion; mobile advertising revenue, which accounts for 62% of total advertising revenue, grew 41%.

Analysts polled by Thomson Reuters expect Twitter will lose a penny a share on $283.07 million in revenue. If Twitter meets expectations, it will have achieved 11% revenue growth from last quarter in addition to its third consecutive quarter of net losses, each since its IPO in November 2013. In the first quarter, Twitter exceeded expectations in losses per share by 3 cents and in revenues by 3.7%; however, guidance below consensus sent the stock plummeting.

Check out Jim Cramer's thoughts on why Twitter is a 'battleground stock':

WATCH: More videos from Jim Cramer on TheStreet TV | More videos from Jim Cramer

Here’s what several analysts on Wall Street had to say:

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