Category: Social Media

Twitter’s a Bargain ~ Buy it When its Down ~ Daaahh

Twitter plunges following a Q3 revenue and EPS miss. The revenue miss is shocking, considering the mDAUs surged 17% in the quarter to 145 million. The stock might be stuck at $30 until the company can show revenue growth to top 15% again.

The stock is a bargain with an EV of $20 billion and ’20 revenue targets to top $4 billion.Twitter (NYSE:TWTR) just reported the unthinkable combination of accelerated user growth while substantially missing revenue targets. An investor needs to focus on the user growth and let the revenue problems work themselves out in due time.

Sometime next week after the stock takes the usual three days to bottom out might be a good time to buy

PINS ~ Pinterest, Inc.

Pinterest, Inc. is a social media web and mobile application company. It operates a software system designed to enable saving and discovery of information on the World Wide Web using images and, on a smaller scale, GIFs and videos. The site was founded by Ben Silbermann, Paul Sciarra, and Evan Sharp.

We like the Pinterest story, because it’s supported by secular user, revenue, margin, and profit growth drivers. Second quarter numbers breezed past estimates, and affirmed that this company is at the beginning of a promising multi-year growth narrative.

But the valuation underlying PINS stock already prices in a bunch of that growth.Further near-to-medium term upside in PINS stock may ultimately be limited by an overheated valuation.

Twitter ~ TWTR

Improving Fundamentals & Attractive Valuation

Twitter is implementing a series of initiatives to improve the user experience. User growth is accelerating, engagement metrics are solid and the company is producing better than expected financial performance.The stock is still attractively valued at current levels.

Twitter is an investment proposition with above-average risk levels, but the upside potential in the stock could more than compensate for such a risk in the years ahead.

Twitter is clearly moving in the right direction, but the company is still minuscule in comparison to Facebook (FB) and its 2.1 billion users across its family of services. With 139 million users, Twitter is also smaller than Snap (SNAP), which has 203 million daily active users as of the most recent quarter.

This relatively small size is both an important risk factor from a competitive point of view and also a major opportunity for the company, because it should be relatively easy for Twitter to continue accelerating user growth if management makes the right moves going forward.

Twitter ~ TWTR

Twitter stock has moved sideways over the last year, generating negative return.However, the company’s financial and business metrics have continued to improve over time.

The current stock price discounts a relatively pessimistic future. This may provide an opportunity to buy Twitter with a substantial margin of safety.The fair stock price is at least 22% higher than the current level.

Snap +6.7% as Q2 users, revenues, EPS all beat expectations

Snap (NYSE:SNAP)

Daily active users for Q2 came in at 203M, from Q1’s 190M (and up 8% Y/Y) and beating expectations for about 192M. They rose both sequentially and Y/Y in North America, Europe, and Rest of World, and on each of the iOS and Android platforms. Average Snaps per day rose to more than 3.5B.Revenues rose 48% to $388M, and the company trimmed its operating loss to $305M from a year-ago loss of $358M.

Net loss improved accordingly, by $98M to a loss of $255M. EBITDA improved by $90M to -$79M.Operating cash flow improved by $104M to -$96M; free cash flow improved by $131M to -$103M. For Q3, it’s guiding to revenue of $410M-$435M (above expectations for $400.2M, and up from $298M a year ago) and EBITDA of -$85M to -$60M, vs. last year’s -$138M.

Twitter

Might Be One Of The Top Picks For The Next Year

Twitter stock has moved sideways over the last year, generating negative return.

However, the company’s financial and business metrics have continued to improve over time.

The current stock price discounts a relatively pessimistic future. This may provide an opportunity to buy Twitter with a substantial margin of safety.

The fair stock price is at least 22% higher than the current level.

SNAP : Irrational Respect

7/5/2019 ~ 6 Month

Snap has gained 200% off the lows due to nothing more than a positive indication on user trends.

The average analyst is still neutral on the stock despite several headline-grabbing bull calls.

The stock has a stretched valuation compared to the peer group and is likely to return to a group multiple of 6x EV/S.

Snap still needs to prove the company is on a profitable path to even warrant the peer multiple.

Despite some positive signs, Snap (SNAP) hasn’t done anything to change the actual financial trajectory of their business. The stock market has given the company and founding CEO Even Spiegel some incredible respect

Pinterest – [PINS]

Blue Horseshoe Loves Pinterest…Breaking $30 This Week

Analysts react to the first post-IPO earnings report for Pinterest (NYSE:PINS), which included a wider than expected loss and downside full-year outlook.

Baird (Outperform rating) says that “a few high-end estimates” skewed consensus for the quarter and praises PINS’ ongoing strength in U.S. ad growth and early signs of international traction.

Nomura (Buy): “Our estimates change only slightly, and we remain confident in our longer term thesis that Pinterest will be a much larger company over time as MAUs continue to ramp and the monetization gap continues to close.”

Credit Suisse (Neutral) says international MAUs and ARPUs fell short of the firm’s expectations but notes that the international sales ramp is just starting and expansion to new content verticals will likely bring on more advertisers.

May 17, 2019 8:25 AM ET|About: Pinterest, Inc. (PINS)|By: Brandy Betz, SA News Editor

Twitter Stock Defended At Loop Capital Due To New Ad Formats, 2020 Events — MarketWatch

Loop Capital analyst Alan Gould reiterated his upbeat view of Twitter Inc. shares (TWTR) on Friday, a day after the stock dropped on concerns about second-half comparisons and spending plans (http://www.marketwatch.com/story/analyst-now-seems-to-be-an-especially-opportune-time-to-sell-twitter-2019-06-13). “We do not view 2H comps as difficult or expectations aggressive,” Gould wrote. “We think user growth headwinds from health initiatives are softening as Twitter makes progress in identifying and deactivating suspicious accounts.”

He said that improved platform health can be a “growth driver” for Twitter, while the company faces several intriguing “enTacala Ingagement drivers” next year, including the U.S. presidential election and the Olympics in Tokyo. “While we think Twitter is not particularly event-dependent, we cannot ignore the 2020 calendar,” Gould wrote. He’s also upbeat about direct-response advertising, which could improve Twitter’s monetization strategy given that the ad format is a small part of revenue, especially relative to peers. Twitter shares are near flat in Friday trading. They’ve gained 26% so far this year, as the S&P 500 has risen 15%.

-Emily Bary