Twitter Inc. heads towards its quarterly earnings report with a stock that has risen more than 40 per cent since April when much of Wall Street was ready to write off the tech company.
The company’s share price popped after its most recent earnings report in April, when Twitter disclosed better-than-expected user growth.
The number of people on Twitter will be in sharp focus today, when investors and analysts will see if it has kept up the six per cent year-over-year growth in monthly active users it reported in April. Twitter said then that it had 328 million users.
“For a company that people thought six months ago was knocking on death’s door and going the way of Myspace and AOL, the double-digit rebound and the continued acceleration in users has really surprised investors,” said BTIG Research analyst Richard Greenfield.
People are willing to give them the benefit of the doubt if they start to grow again
Twitter shares closed on Tuesday at $19.97, nearly flat on the day but up 41.4 per cent since its stock hit an intraday low of $14.12 on April 17.
The S&P 500 information technology index is up 10.6 per cent since its April 17 closing price.
The surge of interest is a morale boost for Twitter, which has limped through past earnings announcements, struggled to keep a stable management and suffered unfavourable comparisons to its bigger and more profitable competitor Facebook Inc.
This month, Twitter had a streak of 12 days when its shares closed up.
The business is expected to report quarterly revenue of $536.6 million, according to a Thomson Reuters’ forecast average. That would be a drop of 10.9 per cent from $602 million a year earlier.
What has investors upbeat, though, is the number of people on the service, which public figures including US President Donald Trump use to blast out 140-character messages.
“People are willing to give them the benefit of the doubt if they start to grow again,” analyst Michael Pachter said.