Social media giant Twitter (TWTR) is set to report first-quarter earnings results after the closing bell Tuesday. Don't hold your breath expecting great results or a quick turnaround. But the stock, from a risk vs. reward perspective, is likely to go higher on the results.
For the quarter that ended in March, the average analyst earnings-per-share estimate predicts the San Francisco-based company earns 10 cents per share on revenue of $607.84 million, translating to year-over-year growth of 42.8% and 39.4%, respectively. For the full year ending in December, earnings are projected to climb 37.5% year over year, while full-year revenue of $2.96 billion would mark a 33.5% rise from the same period a year ago.
The once-heralded Wall Street darling turned punching bag has a lot to prove. Twitter must show it can grow its user base and has figured out how to make money from the users that it has -- two things CEO Jack Dorsey, since his return last year, promised to deliver. Investors are still waiting.
Jim Cramer and Research Director Jack Mohr commented on Twitter earnings on Friday. "We think investor focus will continue to be on monthly active users .... If MAUs come in flat, profitability within the company's core advertising business will likely be severely constrained for the balance of the year. On the call, we will be interested in engagement trends, the company's recent deal with the NFL to live-stream Thursday night games, color around Periscope (especially given competition from Facebook Live), recent changes to its board of directors and potential for expansion into China."