Risk/Reward Rating: Negative
Twitter (TWTR) has had easy comparisons in 2021 versus depressed sales last year due to the COVID pandemic. For the second quarter of 2021, the company reported 74% revenue growth compared to last year. A more meaningful base year for comparison is 2019. In this case, total revenue for the first half of 2021 is up 37% compared to 2019’s first half, registering an average annual growth rate of 18%. Twitter’s primary revenue source is advertising which accounts for 88% of revenue.
The company reported daily active user growth over last year of 11% to 209 million users. This is an important metric for advertisers in judging the attractiveness of the Twitter platform for ad dollars. While the revenue and user growth rates are respectable, they would not be considered dynamic growth rates given the increased advertising spend online and on social media platforms in particular.
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