The much awaited Twitter earnings report is finally going to be official next month. The well renowned social media networking company has many reasons to lure investments. Investors are hopeful. Although the company had a very shaky start in the beginning of 2014, analysts have kind of bullish view regarding the scope of its stock price rise. They have been inviting investments. With its highly innovative nature, the company has always been seen to be experimenting with its products.
Analysts are eager to know if the company’s earnings report will be able to live up to the high expectation of the investors. Although the company’s shares have been very volatile in the past, that doesn’t restrict the future growth opportunity. Even the initial public offering of the company saw a huge positive public response. As per the recent statement issued by a company spokesperson, the fourth quarter fiscal year 2013 results will be announced on February 5th 2014. That will be the time when the company will take questions from the investors and the analysts through its microblogging service. The company has asked to send any question regarding the company’s fourth quarter earnings results to the Twitter’s investor relations account.
The company’s fourth quarter earnings results announcement is going to be its first official announcement since the company went public last year. Naturally, all eyes are now on its performance. The question is whether or not Twitter will be able to give investors what they expect. This is where the challenge begins. Analysts and investors are betting that this organization will do great in the future through digital advertising and by growing its customer base in the international market. They are now waiting to see how efficiently the company aligns its earning figure with their mathematics and calculations.
The reason analysts are hopeful about Twitter’s stock is that the company has been able to show a consistent revenue growth. The most important tip for investors would be taking a look at the company’s trend of revenue growth. Analysts say they should particularly analyse the revenue growth arising from advertising as the company’s 90 percent of the revenue comes from advertising. The growth of revenue from advertising accelerated by 123 percent in the third quarter and analysts expect to see the same momentum in the fourth quarter as well.
To be able to better judge the company’s performance, investors should also look at the user growth and engagement. In the past, the company showed a 39 percent year over year increase in the rate of active monthly users. The last important thing to consider is the company’s monetization gap when compared to Facebook. Twitter received 66 cents for each active monthly user and Facebook received $1.5 per active user. The company reported a year over year monetization growth of 61 percent, which is higher than Facebook’s monetization growth of 40 percent.
Many investors are expecting the company to report revenue of $235 million and EBITDA of $31 million for the long waited fourth quarter. Even the Twitter’s microblogging site has seen a remarkable ad spent growth potential. In all, it can be said that the market sees a mixed opinion regarding the company’s earning results.