Social media stocks are struggling of late as privacy changes made by Apple (NASDAQ:AAPL) to its iOS is making life more difficult for advertisers to determine how well their campaigns are doing. Snap (NYSE:SNAP) fell after it posted underwhelming results due to the changes.
And on Oct. 26, Twitter (NYSE:TWTR) also disappointed investors as its third quarter revenue of $1.284 billion came in a shade below the $1.285 billion that analysts were expecting for the period. Its monetizable daily active users of 211 million were also slightly below Wall Street forecasts of 211.9 million.
Although the company generated 37% year-over-year revenue growth, it was still not enough to avoid a selloff of the stock. Before the release of its earnings report, Twitter was trading at over $61 but would go on to fall in the days after the results came out. It would end up finishing the week at $53.54 – down 13%. The last time the stock was trading this low was back in May.
Analysts were quick to downgrade the stock on the news, with many setting price targets at around $70, which would still be higher than it was before releasing its earnings numbers. Twitter's stock could rebound given the sharp drop in price. And with the company now finding more ways to monetize its business (e.g. super follows), over the long term there's more potential for the business to turn a profit (its net loss in Q3 was $537 million) – but only if you're willing to be patient and hang on for the long haul.
Tech Insider
