Twitter (TWTR) Stock Falling as Usage Among Investment Professional Stalls

NEW YORK (TheStreet) -- Shares of Twitter (TWTR) are declining 1.46% to $36.46 in Monday's afternoon trading session as use of the social media platform among investment professionals has stalled, according to Brunswick Group's 2015 global investor media survey, The Wall Street Journal reports.

The survey, which shows the growing importance and use of digital and social media by financial professionals in making an investment decision, showed that there was no growth in use of Twitter among financial professionals in the past three years. For the third consecutive year, 28% of the investment professionals surveyed used Twitter, the Journal noted.

Additionally, 13% used the site to "launch the construction of an investment decision," which is down from 14% last year.

"That's a sharp change from the trajectory of those responses between 2009 to 2012 when Twitter's use among investors surveyed grew quickly," the publication highlighted.

Many of the professionals surveyed receive Tweets through Bloomberg terminals instead of going directly to the site, the Journal added.

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. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time."

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.
  • Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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

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