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After 12 years, Twitter finally makes a profit

09 February 2018

During the same quarter past year, the company earned $0.11 earnings per share. Monthly users in the US averaged 68 million for the period, up 2% year-over-year and a decrease of 1 million quarter-over-quarter, reflecting the impact of the change in Safari.

The social media platform said the fourth quarter revenue growth was "driven by continued strong engagement growth, improved revenue features, improved ROI (return on investment), and better sales execution". Quarterly GAAP net income was $91 million, representing a GAAP net margin of 12% and GAAP diluted EPS of $0.12. Longer term, the shares had added 58.6% over the last nine months before today's plunge, and hit a two-year high of $48.40 in late November.

That came even as social media companies are grappling with a regulatory backlash in Europe and the United States over privacy, possible user addiction, hate speech and alleged abuse of by Russian Federation to sway foreign elections.

The profitability is an important achievement for Twitter, which has lost money consistently since its public offering, sparking speculation on whether it needed to sell itself to keep operating. Aegis raised Twitter from a "sell" rating to a "buy" rating and set a $30.00 price target on the stock in a report on Tuesday, January 16th.

Relative strength index (RSI-14) for Twitter, Inc.

Shares in Twitter jumped 26% in pre-market trading on Thursday after the social network reported its first ever profits.

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Wall Street now has an average target price of $21.77 for the stock - 45% below the stock's opening price of $34.45 Thursday. 146,732,709 shares of the stock were exchanged, compared to its average volume of 32,007,105. The stock has a market cap of $18,748.11, a P/E ratio of -52.76, a PEG ratio of 11.01 and a beta of 1.14. According to their observations and findings, the stock could provide a high EPS of $0.23/share and a low EPS of $0.08/share.

Several other hedge funds and other institutional investors have also recently made changes to their positions in TWTR.

Daily active users were up 12% year over year, marking Twitter's fifth quarter in a row of double-digit growth in the key metric. Ad revenues stood at $644 million, registering a growth of seven percent over previous year.

This, despite growth stalling compared to the previous quarter. After a 40% run-up in its stock over the a year ago, it was already looking pricey. While the Short-Term Technical Indicators for the stock on 7-Day Average Directional Indicator shows "Buy" signal. Nordea Investment Management AB lifted its holdings in shares of Twitter by 2.3% in the 2nd quarter.

"They are playing whack-a-mole with these problems", said Michael Connor, whose Open Mic group helps investors push tech companies to address privacy, abuse and other issues.

Shares climbed by 15% in the news. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link. The disclosure for this sale can be found here.

After 12 years, Twitter finally makes a profit