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发帖数: 290 | 1 51 买的，29 涨起来，应该再涨不动了。
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发帖数: 290 | 2 When Will Twitter Become Profitable
Jun. 29, 2014 8:37 AM ET | 4 comments | About: Twitter, Inc. (TWTR)
Disclosure: The author has no positions in any stocks mentioned, and no
plans to initiate any positions within the next 72 hours. (More...)
Summary
The network’s growth rate is slowing down, but that doesn’t mean it
isn’t growing.
This business generated $24 million in revenue for the company this
quarter. Atpresent, that's 10% of the total revenue. But that doesn't mean
it can't grow.
Twitter is expected to generate an annual EPS of 25 cents only which
gives it a forward P/E of 125x.
That question about Twitter's (TWTR) health has been on everyone's mind for
quite some time now. And some would amend the question with words like "will
" and "ever." Consider the dotcom boom of the nineties, which was followed
by the bust of 2001. There was an "irrational exuberance" around web
companies, even ones that had no discernible and clearly mapped out source
of revenue. Back then, that one yardstick of knowing a company didn't have
its act together, was hearing a vague answer about "umm..advertising" when a
dotcom company's execs were pushed for an answer about revenues.
We're supposed to know better now. Yet, the social media boom that we are
seeing these days comes close to that. Now some have, indeed, turned
advertising into a viable revenue stream. Google (GOOG) (not a social media
company, unless you count YouTube) does get its revenue from advertising.
And Facebook [FB] (which most definitely is a social media company) hasn't
done too bad for itself on the advertising front.
What's the case with Twitter?
So, how much in the red is it?
Twitter, a hugely successful company in terms of number of users, hasn't
been doing too well. It's not that the revenues aren't pouring in; Twitter's
revenue for the first quarter of 2014 grew by 119% from the same period of
2013. But at $250 million, this revenue still meant a loss of $132 million.
The loss figure for 2013? Merely $27 million. Which were better times, then?
Huge number of users; what's going wrong, then?
Several things. For starters, there's huge and then there's gargantuan.
Twitter is the former; Facebook is the latter. It is unfair, they say, to
compare apples and oranges, but you can't help it if they're both being sold
at the same cart. Advertising is the name of the game for both the
companies and Facebook is just way bigger than Twitter. Facebook has over a
billion active users on mobile devices alone. Twitter has 255 million on
mobiles and desktops combined.
But the number of users is just one aspect of the situation. There is also
the question of how conducive the platform is to advertising. The verdict
isn't out on whether Twitter is or isn't a good fit for advertising.
This quarter, a key Twitter revenue marker, revenue per 1000 timeline views,
slid down to $1.44 from $1.49.
Things can get a lot better
Twitter has been altering its platform and has made its interface more
attractive to increase user engagement. These tweaks are geared towards
increasing desktop and tablet users, not mobile, which is the bulk of where
the company's revenue comes from. But this counts as business development.
Marketing site eMarketer predicts that the site will grow up to hit 400
million users by 2018. Now, the bulk of this growth is going to be in the
Asia-Pacific region and the company, like Facebook, makes most of its money
from developed states. But with economic growth in the region, coupled with
shifting of ad revenue online there as well, there could be a lot of revenue
potential.
Detractors might point out that the users are growing but the growth rate is
declining (that's a second-order differential equation for all you calculus
lovers out there). Fair enough, but this is compensated by the fact that
there is little-to-no serious competition in the microblogging sector either.
There is also the post-IPO margin compression that companies have to deal
with, which keeps profit margins down. In time, Twitter would sort of handle
these issues the way Facebook did.
Ad revenue per 1000 views might have shrunk to $1.44 but that could be
attributed to how fourth quarter revenues are usually higher. As far as the
secular trend of revenues is concerned, the metric has been rising
consistently.
Twitter's stock, at $37.98, might be a little over 50% of what it was worth
at the end of 2013, but Wall Street's patience isn't about wear thin in
light of the possibility of future business.
…and it isn't just advertising, folks
Data licensing is a promising driver of revenue growth for the company. Do
keep in mind that there are 500 million tweets on a daily basis on the site.
That's a data goldmine, if there ever was one.
This business generated $24 million in revenue for the company this quarter.
At present, that's 10% of the total revenue. But that doesn't mean it can't
grow.
The acquisition of Gnip, a long-term data partner of Twitter's and a leading
provider of social data, is another indication that the company is looking
at consolidating this revenue source.
Twitter's revenue growth is being fueled by the growing online advertising
market, Much of Twitter's ad revenue growth is being driven by the
increasing number of ad impressions. Twitter recently touted some figures
around high ad engagement levels which could help it command higher pricing
in the future, users shifting to mobile, attractive ROI (return on
investment) for investors and high engagement levels due to real-time
conversations. At its current size, and lack of competition in the
microblogging (if not ad revenue) front, Twitter belongs to the too-big-to-
fail category. There are clear paths to monetization for the company. The
trick here is for investors to grind their teeth and show some grit. It'll
pay off. Sell side analysts estimate that Twitter per share quarterly
earnings will be in black by the fourth quarter of this year. For the next
year, Twitter is expected to generate an annual EPS of 25 cents only which
gives it a forward P/E of 125x. |
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