Twitter Stock Analysis, Valuation (NYSE:TWTR)

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$17.76 $0.16 (0.91%) TWTR stock closing price Sep 19, 2017 (Closing)
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Twitter
Updated on : Sep 19, 2017
previous close
TWTR 17.8 (0%)
NASDAQ 6461.3 (0%)
Closing Price On: Sep 19, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q2
$million
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
-12.2%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Debt/Equity Ratio
Debt:
1.75B
Debt/Equity Ratio:
 0.37
Compared to the industry
Cash Flow
Operating cash flow:
$189.7M
Net Income:
-$116.5M
PROS      CONS
FCF Margin
Operating Margins
Net Margins
High Debt Burden
ROIC
ROE
PE Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
PE: N/A
TWTR PS :
5.3
Industry PS :
2.7
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
-7.6%
Return on Equity:
-9.7%
Free Cash Flow Margin:
25.5%
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Twitter Analysis Video

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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.

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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 registered an average TTM Net loss of -18.2%.
  • Twitter is debt laden and has a high debt/equity ratio of  0.37.
  • The company does not have profits. Hence the PE ratio is meaningless for TWTR stock.
  • TWTR stock is trading at a PS multiple of 5.3, which is a negative when compared 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.

Comments on this video and Twitter stock

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.