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

Twitter (TWTR) closed the most recent trading day at $35.40, moving -0.9% from the previous trading session. This change lagged the S&P 500's 1.05% gain on the day. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, added 0.66%.

Coming into today, shares of the short messaging service had gained 8.14% in the past month. In that same time, the Computer and Technology sector gained 6.34%, while the S&P 500 lost 1.56%.

Wall Street will be looking for positivity from TWTR as it approaches its next earnings report date. This is expected to be July 23, 2020. On that day, TWTR is projected to report earnings of -$0.03 per share, which would represent a year-over-year decline of 113.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $690.53 million, down 17.93% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.35 per share and revenue of $3.23 billion, which would represent changes of -85.23% and -6.66%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for TWTR. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TWTR is currently a Zacks Rank #3 (Hold).

In terms of valuation, TWTR is currently trading at a Forward P/E ratio of 103.04. For comparison, its industry has an average Forward P/E of 71.11, which means TWTR is trading at a premium to the group.

We can also see that TWTR currently has a PEG ratio of 2.67. 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. Internet - Software stocks are, on average, holding a PEG ratio of 3.99 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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