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Twitter Company Analysis (#TWTR)

Twitter Company Analysis (#TWTR)

28 April 2021

Twitter is a social network for public messaging through a web interface, SMS, instant messaging, or third-party client programs for Internet users of any age. Use of the service is free of charge. Use via SMS is charged by the operator according to the user’s tariff plan. In March 2019, Twitter launched a new app called Twttr, which will serve as a platform for testing new features. The program will allow developers to test new ideas and get feedback, and if they get a positive experience, implement them in the main version of the Twitter client

The company’s main competitors are Facebook, Snap, and Alphabet.

Revenue for 2020: $3.7 B (+7% compared to the previous year)

Operating profit for 2020: $27M (-93% year-over-year)

Net loss for 2020: $1.1 B

Earnings per share for the latest quarter: $0.38, up from $0.31 forecast

The crisis has seriously affected the company’s advertising revenue

Geographical distribution of revenue:

United States – 55.94%

Japan – 14.74%

Rest of World – 29.32%

Twitter is a relatively young technology company. Therefore, it is expected that the company’s management will reinvest most of the cash flow back into the business, rather than spend it on paying dividends. Despite this, the company’s quotes year after year overtake the growth of the S&P 500 index. The company also shows a systematic growth in revenue year-on-year, which is a good indicator for investors.

Thus, # TWTR is a technology company that gets most of its revenue from advertising contracts. It is expected that this segment of revenue declined significantly during the pandemic, when corporations were less willing to invest in advertising. However, the company’s business model is time-tested and shows excellent results in a stable market. It is also worth noting that, like the shares of most technology companies, #TWTR shares are currently valued by the market above their fair value and should only be bought if there is a significant drawdown.

28 April 2021
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