Twitter (TWTR) share has risen 10.0% today after the company announced its second quarter results. The social media giant reported sales of $ 841 million, beating analysts' estimates at $ 829.07 million. It reported adjusted EPS at $ 0.05. In the second quarter of 2018, Twitter reported revenue of $ 710.54 million and EPS of $ 0.08.
Revenue on Twitter increased by 18.4% YoY (year over year) in Q2 and rose by 20.0% in constant currency. Ad sales mainly driven Twitter revenue growth. The company reported that the strength of domestic markets increased sales and expanded profit margins. The company's focus on product improvements improved its average number of earnings from DAU (daily active user).
Twitter advertising sales rose 21.0% in the second quarter to $ 727 million, accounting for 86.4% of the company's total revenue. Domestic advertising sales rose 29.0% in Q2, exceeding 24.0% in Q1
Twitter expects sales in the third quarter of $ 815 million $ 975 million
During Twitter's revenue call, it predicted sales in the third quarter of $ 815 million – $ 875 million, lower in the middle than Wall Street expected at $ 869.31 million. Twitter stated the warm guidance First and foremost, it was driven by two factors, saying: "First, the comparison we face is when we lose the global business upturn in the second half of last year. Secondly, the recent decisions we have taken to write off some older ad formats are better to serve our customers and gain greater focus on revenue product. ”
Twitter share one has made a strong comeback
Twitter share has recovered this year, rising 45.8%. The stock lost significant value in last year's second half, falling from $ 45.64 to $ 26.20 between June and December. Although the stock has returned 144.0% over the past three years, it has traded flat over the past five years.
Comparison of Twitter's future PE multiple of 38.3x with the company's five-year estimated EPS growth of 28.0% makes the stock seem overvalued. However, Twitter can improve the bottom line – revenues are expected to grow by a double digit over the next few years.