Nobody Believes Twitter
Twitter is set to report third quarter earnings after the closing bell. The social media company’s management has issued revenue guidance between $330 million and $340 million. No one believes them.
Even Wall Street which is notorious for playing nice with corporate management is saying that Twitter will make way more money. Although banks on the Street have an incentive to maintain good relationships with Twitter to promote their own corporate access and investment banking businesses, they’re still setting their sales estimates way above guidance.
Wall Street is looking for Twitter to report total sales at least $10 million above the top of Twitter’s guidance range. The consensus from Estimize, which doesn’t have the same incentive structure as the Street, is roughly another $10 million higher than that.
Last quarter Twitter blew revenue estimates out of the water and analysts took note. Summer earnings were boosted thriving mobile engagement and the World Cup helped to some degree as well, but investors are ignoring Twitter’s guidance and demanding sales to increase by 113% from the $168.6 million reported in the same quarter of last year. The pressure is on, after the close we’ll see if Twitter can deliver on the lofty expectations of investors.
Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.