Twitter Stock Analysis, Valuation (NYSE:TWTR)
Twitter Stock Analysis
Our Twitter analysis throws up more reasons to sell than buy the stock, because it has historically underperformed on nearly every financial or fundamental parameter based on which companies are normally evaluated. We have analyzed twitter on various parameters like Twitter revenue growth, profits, and valuation based on PE (See: Twitter PE ratio chart), PS ratios, Twitter's assets and many more. Twitter stock analysis compares it with fast growing Internet industry peers, but still finds it to be expensive and risky buy right now.
Twitter Inc Stock Rating 2.2/5
Our Twitter stock opinion is based on fundamentals of the company. This Twitter stock analysis is based on latest 2017 Q2 earnings. The stock price analysis takes into account the company's valuation metrics.
Should you buy TWTR stock?
- The company has a healthy free cash flow margin of 25.5%.
Should you sell TWTR stock?
- Twitter reported an average operating margin of -12.2% over the Last Twelve Months (LTM).
- Twitter posted an average Net loss of -18.2% in the last twelve months.
- With a debt/equity ratio of 0.37, Twitter is highly leveraged in comparison to Computer and Technology peers.
- PE ratio is meaningless for TWTR stock as the company has losses.
- The company is trading at a price to sales multiple of 5.2, which is overvalued in comparison to the Internet Software industry average multiple of 2.7.
- Twitter has a negative ROIC (Return on Invested Capital) of -7.6%.
- Twitter has a negative return on equity of -9.7%. This indicates that the firm is inefficient at generating profits.
Twitter has been a momentum stock as can be seen from Twitter stock price history, driven more by market sentiments and expectations of future growth and buyouts, rather than financial strength. Our Twitter share analysis indicates a very risky proposition with very high price to sales ratio and non-existent price to earnings ratio, as Twitter is yet to report any net profits. Our stock analysts find twitter stock to be a very risky proposition.