Twitter (TWTR) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Twitter (TWTR) closed at $36.44, marking a +0.8% move from the previous day. This move outpaced the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.62%.

Coming into today, shares of the short messaging service had lost 5.61% in the past month. In that same time, the Computer and Technology sector gained 0.35%, while the S&P 500 gained 2.08%.

Wall Street will be looking for positivity from TWTR as it approaches its next earnings report date. On that day, TWTR is projected to report earnings of $0.18 per share, which would represent year-over-year growth of 5.88%. Meanwhile, our latest consensus estimate is calling for revenue of $828.49 million, up 16.6% from the prior-year quarter.

TWTR's full-year Zacks Consensus Estimates are calling for earnings of $1.05 per share and revenue of $3.53 billion. These results would represent year-over-year changes of +22.09% and +15.97%, respectively.

It is also important to note the recent changes to analyst estimates for TWTR. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TWTR is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, TWTR is holding a Forward P/E ratio of 35.17. Its industry sports an average Forward P/E of 62.28, so we one might conclude that TWTR is trading at a discount comparatively.

Also, we should mention that TWTR has a PEG ratio of 1.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.59 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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