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Twitter Stock Fell 16 Percent Amid Slow User Growth

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TWTR stock fell 16 percent in after-hours trading on Oct. 29 after Twitter reported its third-quarter earnings results. The earnings and sales beat analysts’ consensus expectations. However, the company fell short of the estimates on user growth. We'll discuss the company's third-quarter highlights and outlook.

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What is Twitter’s stock news?

In the third quarter, Twitter reported an adjusted EPS of $0.19 compared to $0.17 in the third quarter of 2019. The adjusted EPS beat analysts’ average estimate of $0.06. Twitter generated sales of $936.2 million in the third quarter, which was 13.7 percent more than it did in the third quarter of 2019. The company beat analysts’ average sales estimate of $777 million.

TWTR Stock Reacts To Twitter Earnings
Source: Pixabay
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Twitter’s earnings report shows that it added 1 million daily active users in the third quarter. The company’s daily user number increased to 187 million, which is below the consensus estimate of 195 million.

TWTR stock fell after Q3 earnings

TWTR stock was down about 15 percent at $44.60 in pre-market trading as of 6:58 a.m. ET on Friday, Oct. 30. The stock rose 8 percent on Oct. 29 and closed at $52.43 with a market capitalization of $41.5 billion. TWTR stock has risen by 4 percent in the last five days and 77 percent in the last year.

TWTR stock is trading 0.9 percent below its 52-week high of $52.93 and 162.2 percent above its 52-week low of $20. Year-to-date, the stock had risen by 63.6 percent as of Oct. 29.

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TWTR stock on Stocktwits

TWTR stock has become a major talking point on Stocktwits and other social platforms. While some investors on Stocktwits see the strong third-quarter earnings results as a good reason to buy TWTR stock, others were bearish about slow user growth and expect the stock to fall.

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What is TWTR’s stock forecast?

Currently, analysts' average stock price forecast for Twitter is $40.99, which suggests a 21.8 percent downside. The highest target price of $59.75 implies a 14 percent upside, while the lowest target price of $19 suggests a 63.8 percent downside. Among the 22 Wall Street analysts tracking TWTR, four recommend a buy, 17 recommend a hold, and one recommends a sell.

It might not be the right time to buy Twitter stock since the stock price could fall more. The company cautioned that the U.S. election could impact ad sales. The social media company expects its costs to increase by about 20 percent in the fourth quarter compared to the fourth quarter of 2019.

What is Twitter CEO Jack Dorsey’s net worth?

Jack Dorsey is the CEO of Twitter and Square. On Oct. 28, Dorsey testified before the Senate Commerce Committee to defend the company's legal liability shield. According to Forbes, Dorsey’s current net worth is $9.4 billion.

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