Credit: Shutterstock photoTwitter'sTWTR shares have gained an astounding 100.0% in the past year, outperforming the industry's 28.5% rally. The scintillating performance can be attributed to its plethora of initiatives that are aimed at expanding user base and engagement.
Notably, in the last quarter, Twitter delivered GAAP profit for the first-time in its 10-year history. Management remains focused on improving the core platform, which is likely to sustain profitability. The company also intends on maintaining consistency across platforms. This was evident from its recent announcement of scrapping Twitter for Mac app from the Mac App Store.
Twitter for Mac had garnered low ratings in the App store, primarily due to lack of updates and intensifying competition from third-party applications. The company's mobile-focus can be blamed for the neglect of the Mac app. Nevertheless, the removal will help it to channelize resources to enhance web and mobile-based applications.
Initiatives to Boost User Growth
Initiatives like the roll out of 280-character limit for tweets (double from the legacy 140 limit) and introduction of Threads have made tweeting easier and more expressive. The company's focus on improving the live video feature has also driven user engagement. Notably, ad engagements increased 75% year over year in the last reported quarter.
The launch of Twitter Lite application on Android devices in 24 countries across Africa, Asia, Europe, Middle East and Latin America was also a prudent move.
Notably, Twitter's revenues are highly dependent on the international market. In the last reported quarter, the company earned nearly 44.5% of its revenues from international markets. Continued strength in Asia Pacific along with improvement in certain EMEA markets drove growth in international markets.
User growth on the social networking platforms are hampered by threats like abusive content, cyber bullying and trolling. In fact, identifying the seriousness of the matter, Twitter took the decision of enforcing rules to handle content that promote violence, hatred and harassment.
We believe these initiatives will ultimately aid in expanding Twitter's user growth. In the last reported quarter, monthly active users remained flat sequentially at 330 million.
Zacks Rank & Stocks to Consider
Currently, Twitter TWTR carries a Zacks Rank #3 (Hold).
Paycom Software PAYC , Facebook FB and The Trade Desk TTD are some better-ranked stocks worth considering in the broader technology sector. While Paycom sports a Zacks Rank #1 (Strong Buy), Facebook and The Trade Desk carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Long-term earnings growth rate for Paycom, Facebook and The Trade Desk are currently pegged at 25.75%, 26.51% and 25%, respectively.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
