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Twitter Set to Beat Q4 Revenue Guidance While Growth in Active Users Forecast to Remain Muted, Wedbush Says

· 02/05/2021 07:04

12:02 PM EST, 02/05/2021 (MT Newswires) -- Twitter (TWTR) is likely to report a "big revenue" beat in Q4 despite expectations of limited growth in audience, according to a research note from Wedbush.

Analysts Michael Pachter and Nick McKay estimate Q4 revenue of $1.15 billion and adjusted earnings per share at $0.32, versus market consensus of $1.19 billion and $0.31 per share. The company is scheduled to report its results after the market close on Feb. 9.

In the last three weeks of Q3, Twitter's ad revenue surged by 19% year-over-year, reflecting an improvement over the 15% drop seen in the last two weeks of Q2, the analysts said, citing the company's Q3 earnings call.

"Management also expressed confidence in Q4 revenue growth due to the planned return of many events and product launches, a heavy holiday buying season that could play out earlier, and an accelerated shift in ad spending from linear to online channels driven by the negative impacts of COVID-19 on in-person events," Pachter and McKay said in the note to clients.

The analysts expect international growth to drive worldwide net monthly daily active user base to 190 million versus consensus of 196 million. In the US, the net number of users is likely to remain flat quarter-over-quarter in the aftermath of the banning of former President Donald Trump's account triggering defections from some of his ardent supporters as well as weeding out of QAnon accounts.

The stock was maintained at a neutral rating with a price target of $47.

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