Twitter (TWTR) Stock Declining Today as Facebook Ups Mobile Advertising Efforts

Twitter (TWTR) stock is down this morning after Facebook (FB) said it is creating its own mobile-advertising distributor to rival MoPub.
By Kurumi Fukushima ,

NEW YORK (TheStreet) -- Shares of Twitter (TWTR) - Get Report are declining, lower by 1.05% to $47.21 in early market trading Wednesday, after the other social media giant Facebook (FB) - Get Report said it is creating its own mobile advertising distributor to rival Twitter's MoPub in an effort to attract more business in a growing market, according to Bloomberg.

Facebook may reveal its latest advertising moves at its F8 developer conference this month, Bloomberg added. Last year, Facebook unveiled its audience network, which allowed advertisers to run their Facebook ads on third-party mobile applications.

In 2013, Twitter acquired to give advertisers a place to serve their promotions to mobile apps and get feedback. On MoPub, advertisers can bid in real time on the most ideal locations for their ads.

Exclusive Report: Jim Cramer's Best Stocks for 2015

San Francisco-based Twitter is a global platform for public self-expression and conversation in real time, where any user can create a tweet and any user can follow other users.

TheStreet'sJim Cramer and Jack Mohr wrote on ActionAlertsPLUS.com what they think about Twitter. Here's a snippet of what they had to say:

Shares traded flat this week on little news. As a reminder, we trimmed our position recently, selling 600 shares, after the stock rallied 15% since the company delivered its better-than-expected earnings report and guidance. Fourth-quarter beat on earnings on strong operating margins (EBITDA margins were 30% vs 18% y/y) and the operating leverage was exactly what we expected would happen (just took longer). Monthly active users (MAUs) were disappointing, with just 4 million net, below the 6 million to 10 million expectation, which had to do with the rollout of iOS 8 integration -- a one-time issue, but importantly the guide back to the 12 million to 15 million quarterly sub growth figures was key. We still like the name and believe it has a number of catalysts working in its favor, but believe incremental upside in the near term will be difficult to achieve. Our target is $60.

- Jim Cramer and Jack Mohr, 'Weekly Roundup' originally published 2/27/2015 on ActionAlertsPLUS.com.

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Separately, TheStreet Ratings team rates TWITTER INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TWITTER INC (TWTR) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TWTR's very impressive revenue growth greatly exceeded the industry average of 18.6%. Since the same quarter one year prior, revenues leaped by 97.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TWITTER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TWITTER INC continued to lose money by earning -$0.96 versus -$1.05 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.96).
  • Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.26 is very high and demonstrates very strong liquidity.
  • Compared to other companies in the Internet Software & Services industry and the overall market, TWITTER INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • TWTR has underperformed the S&P 500 Index, declining 11.57% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • You can view the full analysis from the report here: TWTR Ratings Report
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