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Twitter Inc: How To Play TWTR Stock Ahead Of Q3 Earnings Tomorrow

  • Twitter Inc is now due to report Q3 earnings at 7 A.M. EST (4 A.M. PST) on 27th October.
  • Q3 earnings could make or break Twitter, but existing shareholders could potentially benefit either way.
  • Should you buy Twitter stock going into Q3 earnings?

San Francisco, California-based Twitter Inc (NYSE:TWTR) is now due to report its Q3 earnings before markets open on October 27, and not after markets close, as was scheduled earlier. Twitter's Q3 earnings release could turn out to be a pivotal moment in the company's history, and the micro-blogging site is well poised going into earnings. However, given the amount of buyout speculation, there's more to this earnings release than just the numbers alone. Should you buy Twitter stock ahead of its Q3 earnings release? But first, let's look at the numbers.

Don't Bother With Analyst Estimates

You probably shouldn't bother if Twitter marginally beats analyst estimates or even its own guidance for that matter, because both of those numbers set the bar very low for Twitter. Analysts expect Twitter to report $606.5 million in revenue for Q3, implying a YoY (Year-On-Year) growth of 6.5%. Twitter's own revenue guidance of $590-$610 million, projects YoY growth in the range of 3.6%-7.2%. If you own a stock that just ran up 7% on buyout rumors, those are not the kind of numbers you want to see. Just to put things in perspective, prior to Twitter's Q2 earnings release, analysts expected the micro-blogging site to report a revenue of $678 million. If Twitter can deliver something even close, it'll get everybody to sit up and take notice.

Analysts expect Twitter to report a non-GAAP Earnings Per Share (EPS) of 9 cents, which is lower than the 10 cents it reported a year ago, and Q2's 13 cents a share. So, that's not flattering either. That...