Twitter (TWTR) Stock Declines as Another Executive Departs

NEW YORK (TheStreet) -- Twitter (TWTR) shares are down 1.47% to $34.74 in early market trading on Monday after the company's VP of corporate development and strategy resigned from the company, according to an Re/code report after the closing bell Friday.

Rishi Garg, who joined the company in May 2014 left Twitter to pursue other projects, according to the the tech industry news service.

Garg made the announcement via a tweet on the social media website saying 

Garg's resignation marks the second departure from the company's mergers and acquisition division in the past 30 days.

Longtime director Jessica Verilli left the company to take a job at Google Ventures (GOOGL) late last month.

Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust, which owns shares of Twitter and currently has a 'D' rating, its lowest, on the stock, had this to say about Garg's departure:

"Twitter's dithering is what causes these departures. There is still no good news on this Action Alerts PLUS stock but we are patient betting it can trade down to $30 where we will try to get a better basis on this utter disaster."

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.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TWTR has underperformed the S&P 500 Index, declining 10.88% 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.
  • 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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