US$47.66: That's What Analysts Think Twitter, Inc. (NYSE:TWTR) Is Worth After Its Latest Results

Twitter, Inc. (NYSE:TWTR) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to US$35.84 in the week after its latest yearly results. It looks like the results were pretty good overall. While revenues of US$5.1b were in line with analyst predictions, statutory losses were much smaller than expected, with Twitter losing US$0.28 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the current consensus from Twitter's 34 analysts is for revenues of US$6.04b in 2022, which would reflect a meaningful 19% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 63% to US$0.10 per share. Before this earnings report, the analysts had been forecasting revenues of US$6.10b and earnings per share (EPS) of US$0.19 in 2022. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

The consensus price target fell 13% to US$47.66per share, with the analysts clearly concerned by ballooning losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Twitter, with the most bullish analyst valuing it at US$70.00 and the most bearish at US$30.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Twitter's past performance and to peers in the same industry. It's clear from the latest estimates that Twitter's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Twitter is expected to grow much faster than its industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Twitter dropped from profits to a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Twitter going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Twitter that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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