Twitter Share Price Forecast February 2022 – Time to Buy TWTR?
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Shares of American microblogging and social networking Twitter (NYSE: TWTR) are in the red today, after closing at $36.24 as of February 16th (19:59 EST). The company released its fourth-quarter earnings report on Feb. 10th, where revenue grew 22% year over year to $1.57 billion. While Twitter shares did not rally or drop significantly after the report, they have still shed about 45% of their value over the past six months.
Twitter – Technical Analysis
Twitter’s financial statement indicated a market cap of $28.978 billion with total assets worth $14.06 billion. Revenue for 2021 was at $5.08 billion with a profit margin of -4.36% compared to $3.72 billion in 2020. Twitter’s adjusted net income fell 9% to $284 million, or $0.33 per share.
Oscillators for Twitter such as Relative Strength Index (14)(45.35), Stochastic %K (14, 3, 3)(50.34), Commodity Channel Index (20)(16.83) and Average Directional Index (14)(18.17) are neutral. Moving averages such as Exponential Moving Average (30)(37.75), Simple Moving Average (30)(37.02), Exponential Moving Average (50)(40.14), Simple Moving Average (50)(39.79) and Exponential Moving Average (100)(45.65) are indicating a sell action.
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Recent Developments
According to the recent results, Twitter’s international mDAUs increased 15% year over year and 3% sequentially to 179 million. However, mDAU’s from the US only grew 3% year over year and stayed flat sequentially at 38 million. This worried some investors as the company generated 56% of its revenue from its higher-value users in the U.S. in the 4th quarter. On the positive side, revenue from the US still grew 21% year over year — which nearly kept pace with its 23% growth in international revenue.
Management has reiterated its long-term target of hitting 315 million mDAUs by the end of fiscal 2023. It also expects its revenue to increase by the “low to mid 20% range” in 2022. Twitter’s revenue from ads rose 22% year over year, which already accounts for 90% of its top line. Similar to the last quarter, Twitter did not experience anything from Apple’s (NASDAQ:AAPL) privacy changes on iOS. However, ad engagements still dropped 12%. Twitter offset that decline with a 39% increase in cost per engagement (CPE).
Twitter’s EBITDA decreased 2% to $682 million in 2021 as it increased its total headcount by about 30%. Management plans to boost its headcount by another 20% in 2022. Given Twitter’s sale of MoPub, analysts expect Twitter’s adjusted EBITDA to more than double in 2022. However, Twitter’s spending spree hasn’t been justified by a string of short-lived products including its short-lived “Fleets,” “topics” for tweets, a new tipping feature, and “Twitter Blue” subscriptions.
Should You Buy TWTR?
Investors should be aware that Twitter authorized a new $4 billion buyback plan to replace its existing $2 billion buyback plan from 2020. This may be upsetting to some investors as it merely cancels the dilution from its stock-based compensation instead of reducing its outstanding shares. Twitter repurchased $931 million in shares which have increased Twitter’s number of weighted-average shares by 1% in 2021.
Twitter is focusing on its shift towards higher-value ads. But many analysts think that the company’s buybacks and spending habits are wasteful, and its growth targets for 2023 still seem too ambitious. For the time being, there aren’t any compelling reasons to buy Twitter in this challenging tech market. It thus appears lacklustre from an investment perspective compared to some of the other companies in the sector.
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