Twitter Reports Quarterly Beat; Shares Surge 6%

Twitter (TWTR) posted strong Q2 results that topped analysts’ expectations. Following the upbeat results, shares of the social media giant jumped 5.7% in Thursday’s extended trading session.

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Total revenue grew 74% year-over-year in Q1 to $1.19 billion versus the consensus estimate of $1.06 billion. Adjusted earnings increased 45.5% to $0.20 per share, beating Street estimates of $0.07 per share.

Meanwhile, Twitter’s average monetizable daily active usage (mDAU) jumped 10.8% year-over-year to 206 million.

Costs and expenses in the quarter grew 21% year-over-year to $1.16 billion, while stock-based compensation (SBC) expense was $178 million, up 34%.

Twitter CEO Jack Dorsey said, “As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent.”

Dorsey further added, “We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and medium-sized businesses.” (See Twitter stock charts on TipRanks)

For Q3, total revenue is anticipated to be in the range of $1.22 billion to $1.3 billion versus analysts’ estimates of $1.17 billion.

Following the Q2 results, Robert W. Baird analyst Colin Sebastian reiterated a Hold rating on the stock with a price target of $75 (7.8% upside potential).

Sebastian stated, “We are impressed with the stronger-than-expected monetization metrics in Twitter’s Q2 results (mDAUs were in-line), and suggests that improvements to the company’s revenue-generating products are paying off, also helped by a robust demand environment for digital ads.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys, 15 Holds, and 1 Sell. The average TWTR price target of $67.95 implies 2.3% downside potential from current levels. Shares have increased 81% over the past year.

TipRanks data shows that financial blogger opinions are 63% Bullish on TWTR, compared to a sector average of 70%.