Twitter Trading forecasts and signals

Twitter shares have risen by almost 20% since the beginning of the year. Over the past few years, the social network has been increasingly moving towards the functionality of aggregating news and other media activity, which is bearing fruit: revenue has begun to grow, while investors have again turned their attention to the company's securities. However, Twitter is difficult to compete with Facebook and TikTok in terms of such indicators as growth rates or the number of users. Nevertheless, the social network has quite good income from the sale of advertising. According to the results of the second quarter of 2021, revenue increased by 74% YoY, to $1.19 billion. Advertising revenue in particular increased by 87% YoY, to $1.05 billion. This was achieved due to the effect of a low base, because last year many advertisers decided to take a break in the conditions of coronavirus uncertainty. New products are also being developed: "Tip Jar “(donations to favorite bloggers) and ”Ticketed Spaces" (paid events organized by content makers). In addition, in Canada and Australia, a long-awaited feature was launched that allows you to edit tweets for a short time after publication. It costs $3.50 per month. Like others, Twitter earns especially well from American users, as a result, it is worth paying attention to the drop in the number of visitors from the United States by 3% compared to the first quarter and an annual growth of only 3%. Americans make up 18% of active users, but generate 53% of all advertising revenue. At the same time, the global growth rate of the user base is the weakest in the last two years - 11%. If this trend continues, then we should expect a correction, since it will be extremely difficult to justify an overestimate. According to the results of this year, analysts expect revenue growth by 37%, and next year - by ...

They say there is nothing to do at the market in the summer. But not this year. Last week, the reporting season started in the United States. The reports of American companies for the second quarter promise to be interesting. They will summarize the results of the first half of the year and allow you to make forecasts for the second half of 2021.Why follow the reports?The publication of reports allows you to look at the reported company with new eyes — to see it "as for the first time", re-evaluate the prospects for its development and find new objects for investment.Many companies in their reports give forecasts not only for their activities, but also for the development of the sector as a whole, and also share important statistics. This information helps to analyze the prospects of the issuers themselves and the industries in which they operate. The main points that may affect the forecasts of companies this season are the prospects for the global economic recovery, the fiscal policy of the Joe Biden administration, and trade relations between the United States and China.For speculators, the reporting season is interesting with strong movements in the market. Since companies in the United States usually publish reports before or after trading, significant "gaps"often occur at the opening of the trading session after the release of the report.How did the reporting season start?The reporting season in the United States, as usual, began with the publication of the financial results of the banking sector. Five of the six largest banks reported significantly higher than expected and reduced the volume of loan reserves, signaling that the risks associated with the pandemic are receding.In addition to banks, some large companies from other sectors — for example, PepsiCo and Delta Air Lines-managed to report. And companies such as Nike, Micron Technology and Oracle generally report much earlier than the traditional reporting season.This week, investors are waiting for reports from Netflix, Philip Morris, Johnson & Johnson, Coca-Cola, Verizon, Intel, AT&T, Twitter and many other companies.What are the forecasts?According to statistics, in the last five years, in 75% of cases, the reporting of American companies exceeded analysts ' forecasts, and in the 1st quarter of this year, 86% of the reported issuers beat the expectations (this is the maximum level for five years). On the one hand, such high figures may indicate the strength of the US corporate sector, but there is a feeling that companies and analysts are deliberately making too conservative forecasts in order to give shares a boost to growth at the reporting release. From these positions, 85% is more frightening than encouraging figure.According to forecasts, in the second quarter, the percentage of companies whose financial results will be better than expected will be 77-80%. It is also predicted that the consolidated EPS of the S&P 500 index in the second quarter will show an increase of 63.6% y/y and 6.5% q/q.How will the reporting season affect the market?If this reporting season does not bring a big negative, we can expect further growth of the American stock market. If the reports are worse than expected, and the situation with the coronavirus pandemic worsens, or the Fed begins to curtail its stimulus policy, a correction may begin in the market.In general, there are 2-3 companies in each sector of the economy, whose reporting largely sets the tone for the dynamics of shares in the entire sector as a whole.Whose reports are of the greatest interest this week?  Netflix (NASDAQ: NFLX) On July 20, the second season of “The Witcher” may cause a new rally for the company's shares. The company is also entering the video game market: Netflix has hired Mike Verda, who was developing video games for Facebook's Oculus virtual reality headsets (NASDAQ: FB).Coca-Cola (NYSE: KO) On July 21, the main intrigue of this report is how much the company's sales will fall after the episode with Cristiano Ronaldo, who at one of the press conferences removed bottles of Coca-Cola from the table with the words "Drink water!".Johnson & Johnson (NYSE: JNJ) On July 21, investors will be watching with interest how the company's results were affected by the suspension of sales of its coronavirus vaccine in the United States due to concerns that this vaccination contributes to the formation of blood clots. Recall that in the 1st quarter, the company's profit from sales of the vaccine amounted to $100 million, that is, just over 2% of the total profit.Twitter (NYSE: TWTR) On July 22, Twitter launches a "blue" subscription. Twitter Blue allows you to set a delay of 30 seconds when publishing a message and correct typos before the tweet is published. The subscription also provides access to an improved bookmark system for saved tweets. The subscription price is $2.99 per month.American Airlines (NASDAQ: AAL) On July 22, American Airlines announced an improvement in its forecasts for the results of the second quarter. The airline's forecasts range from a net loss of $35 million to a net profit of $25 million for the quarter.American Express (NYSE: AXP) On July 23, the company is expected to present a strong report, as well as report a decrease in reserves to cover the risks associated with the coronavirus pandemic.How to analyze the reporting? Tips for investorsExamine the reporting calendar and select the reports that you will track. Study the company and the sector in which it operates in advance.Remember: buying shares before the report is released is a big risk, although the market can give you a good premium for your courage.Do not rush to buy paper immediately after the release of the report: study the figures and assess the company's prospects on the short, medium and long time horizon.Compare the published figures with the forecasts of the company itself and independent ...

Twitter is an American social network for the public exchange of short messages. Maintaining your page is done in the microblog format.Today, the company has about 200 million active users and continues to actively develop to remain competitive. Let's figure out what the company earns, compare it with its competitors and make an investment conclusion.Twitter's businessTwitter's business is built on two main segments:Advertising services include the promotion of tweets, accounts and trends, as well as the classic placement of advertising on the site and in the application.Data licensing and so on. This segment includes the sale of analytics and statistics on actions and behavior to users - that is, data necessary for marketing purposes.The overall growing trend is present in the revenue of each segment, although drawdowns occur periodically. The advertising segment brings about 86% of all revenue. It is worth noting that revenue is mostly generated in the United States.The gross margin for the first quarter of 2021 decreased Q/Q and Y/Y. Overall, the financial results were strong, but compared to other competitors in the advertising market, they look ambiguous. Shares began to decline, as Twitter expects less revenue in the second quarter than Wall Street forecasts.Comparison with competitorsIn the advertising market, Twitter has many competitors of different sizes, but each works on different platforms that are not similar to each other. For example, our Twitter is a public microblog, Google has a YouTube video hosting and a search engine, Faceebook is a full-fledged social network with many functions, Snap is a messenger whose feature is a video message with different filters applied to the image, and Pinterest is a photo hosting at all.If we discard the specifics of business models and evaluate the effectiveness of companies from a financial point of view, it turns out that Twitter is undervalued. Yes, the financial condition of the company does not look impressive, sometimes it records losses, but among the competitors, the "bird" has somewhere to fly.What are the prospectsThe business of social networks is mainly tied to advertising and requires that the platform be popular. Twitter aims to increase the number of active and monetized users by a third by 2023, to 315 million against today's 200 million. By this time, the company's revenue should almost double to $7.5 billion.To implement this plan, it is necessary to improve the platform. The company has the following solutions:A paid Twitter Blue subscription is designed to help diversify advertising revenue. The subscription will still work in Canada and Australia, there is no data about the USA yet. The subscription itself will provide an opportunity to organize collections of tweets, cancel sending a new tweet, add an interface for reading long posts and customization. Later, they plan to expand the opportunities.Last week, Twitter added 2 new features: Ticketed Spaces and Super Follows. Super Follows is a paid subscription to an account for access to private content. The service resembles a donation, that is, it allows popular users to monetize the audience by receiving a fee from subscribers for access to special content. Ticketed Spaces, on the other hand, are one-time payments for one event. Like a ticket to a concert or conference, where you can ask a question to the speaker, but only on Twitter. The price can vary from $1 to $999. This feature makes Spaces more competitive compared to Clubhouse.Users will receive up to 97% of revenue from the purchase of Spaces tickets and subscriptions to Super Follows. Twitter will receive 3% if the income is up to $50 thousand, if more, then up to 20%.With the Super Follows feature, users can customize the content they offer to their subscribers and choose from price categories of $2.99, $4.99 or $9.99 per month.This year, Twitter plans to increase its staff by 25%. An increase in investments can hit the financial results. But management expects revenue growth to exceed cost growth, with the impact of the pandemic decreasing.RisksReduced interest in the platform.The economic downturn may lead to a reduction in advertising budgets.Strengthening the position of competitors, especially new solutions in various social networks.Weak profit dynamics in the current year.Claims from government services in different countries, blockages, hacker attacks.Investors also fear that the plans for 2023 are difficult to implement, since Twitter gives weak forecasts for the second quarter of 2021.Technical pictureAfter the publication of the last report at the end of April, the shares fell significantly in price, forming a large gap down. Since mid-May, the quotes have begun to actively recover, at the moment the entire drawdown has been redeemed.Now the target of buyers is the range of $71-72.5, its breakdown from the bottom up contributes to the further recovery of the upward trend, and the benchmark will be $80. From the technical side, this is possible according to the weekly schedule. In the long term, this scenario is the main one.Read more: What is a Benchmark in investment and tradingBut on the daily chart, the RSI indicator is in the overbought zone, which creates risks for a correction. At the same time, it can go sideways, as it was from March to April 2021.A breakdown of the $64-63 level from top to bottom can indicate a new test of the 21-day moving average at a loss of $60.7.FinallyTwitter has local difficulties with attracting customers and monetizing its platform. Management has started to make the right steps towards subscriptions, but it will take a long time to implement this idea. Compared to competitors, stocks and financial indicators do not look impressive and stable, which makes quotes constantly subject to high volatility and risks of a deep decline.Read more: Volatility: types, how to track and how to useIn the long term, with the correct implementation of the new strategy, the shares will receive a driver for growth. On the horizon of the year, our target is the level of $80.Since the beginning of the year, Twitter's shares have grown by 25.5%, and over the past 12 months - by ...