TWTR: Thoughts into the Print (2Q15)

Takeaway: We're not sure what happens on this print since it all depends on mgmt. TWTR will need to rebase expectations again, question is when.

KEY POINTS

  1. 2Q15 = UGLY PUNT: We're not sure which way the ball is going to bounce on this print since it really depends on how mgmt chooses to address the street (appease or rebase).  We see some upside to the print off light 2Q guidance, especially if it can sustain its CPE tailwind from 1Q15.  Further, mgmt's cautious 2Q MAU comments on its 1Q15 call should offer some breathing room as well.  But we're not sure if mgmt is going to try to appease the street as they historically have and guide high 3Q/increase 2015, OR attempt to rebase expectations prior to its 2016 guidance release.        
  2. WILL NEED TO REBASE AGAIN: We remain short for this reason.  Even though the 2Q15 print can go against us, we suspect that upside to be short-lived at best.  For context, the bulk of TWTR's 2015 guidance cut was concentrated into 1H15.  In turn, that's where consensus has concentrated its estimate revisions as well.  Consensus is now looking for TWTR to essentially flat-line a +50% advertising revenue growth rate from now through the end of 4Q16.  That will be a tall order given its precipitous decline in ad engagements, which we expect to continue without a clear shift in its monetization strategy (see note below).

 

TWTR: Thoughts into the Print (2Q15) - TWTR   2Q13 Supply Shock slide

TWTR: Thoughts into the Print (2Q15) - TWTR   FC Ad Revenue

 

 

Let us know if you have any questions or would like to discuss further.

 

Hesham Shaaban, CFA

@HedgeyeInternet 

 

 

TWTR: Rock and a Hard Place (1Q15)

04/29/15 08:15 AM EDT

[click here]


Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more