But while the uncertainty around where the company will head under the new leadership of Parag Agrawal plays a role in current numbers, that's not the only reason the social media platform's share price has fallen. Drops in user engagement have left Twitter stock floundering. Shares fell by 20% in the last year and are now back to around the same price that they were when the company went public in 2013.
Can Twitter Grow?
While some market watchers have hypothesized that Twitter has reached its limit for growth as a company, others believe the current downturn offers a valuable buying opportunity.
Elliot Turner, chief investment officer at RGA Investment Advisors, told Barron's that new product launches and company goals to reach 315 million active users by 2023 make the company poised for another explosion in value.
"This is a strategically significant platform, and by all objective measures it’s actually cheap," Turner said.
Recently reaching as low $42.07, Twitter trades at 4.5 times the $7.5 billion in revenue expected for 2023. Other Twitter initiatives, such as the audio forum Spaces, are growing increasingly popular but may take more than one earnings period to show in the numbers.
A FactSet tally predicts revenue increases of 40% to $5.1 billion this year, 20% to $6.2 billion in 2022, and up to $7.5 billion in 2023.
"If you've followed Twitter's stock for eight years, it's mostly been a frustrating ride," Brad Ginesin wrote for TheStreet's RealMoney.
"With the share's pricey metrics, it's often sentiment-driven and unloved, especially relative to other social media darlings. Yet, there have been key buying opportunities along the way."