NEW YORK (TheStreet) -- Shares of Twitter Inc (TWTR) - Get Report were up 0.19% to $34.77 in pre-market trading Tuesday, ahead of the micro-blogging site's fiscal second quarter earnings results, due out after the closing bell later today.
Twitter is poised to report a year over year rise in both earnings and revenue in its latest quarter.
Wall Street estimates call for a profit of 4 cents a share on sales of $481.13 million, according to analysts polled by Thomson Reuters.
Investors will likely be digging into the quarterly report, paying close attention to the micro-blogging site's user growth, engagement, and monetization, according to The Wall Street Journal.
Shares of Twitter have fallen by roughly 9% in the past 52 week period.
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.
The company generates its advertising revenue primarily from the sale of its three promoted products which include promoted tweets, promoted accounts and promoted trends.
Separately, TheStreet Ratings team rates TWITTER INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate TWITTER INC (TWTR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Internet Software & Services industry average. The net income has decreased by 22.7% when compared to the same quarter one year ago, dropping from -$132.36 million to -$162.44 million.
- In its most recent trading session, TWTR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- TWITTER INC's earnings per share declined by 8.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($0.34 versus -$0.96).
- Despite currently having a low debt-to-equity ratio of 0.43, 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 10.08 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.
- You can view the full analysis from the report here: TWTR Ratings Report