On Wednesday, Twitter Inc. (NYSE:TWTR) shares plunged by more than 9% after reporting its fiscal third-quarter results. The company announced its most recent quarterly results Tuesday after markets closed missing analyst expectations on revenue and earnings.
The company posted fiscal Q3 non-GAAP earnings per share of -$0.67, missing the consensus Street forecast of $0.18. In addition, its GAAP EPS of -$0.67 also came short of the average analyst estimate of $0.01, while revenue for the quarter increased by 36.8% from the same period a year ago to $1.28 billion, in line with estimates.
Twitter looks overvalued
From an investment perspective, Twitter shares trade at an expensive forward P/E ratio of about 47.73, making the stock less attractive to value investors.
In addition, analysts expect its earnings per share to plunge by about 177% this year, before growing at an average annual rate of 41% over the next five years.
Therefore, Twitter seems like a better option for investors willing to overlook the short-term turbulence.
Source – TradingView
Technically, the Twitter stock seems to be trading within a descending channel formation in the intraday chart. However, it has recently pulled back to retest the trendline support, creating an opportunity for a rebound. Moreover, the stock has also fallen closer to the overbought conditions of the 14-day RSI.
Therefore, investors could target short-term rebounds at about $59.69, or higher at $63.55. On the other hand, if the stock completes a downward breakout, it could find support at about $52.24, or lower at $47.93.
Is it too late to sell TWTR stock?
In summary, although Twitter shares seem to be trading under intense bearish pressure, the stock has recently plummeted towards oversold conditions, leaving little room for more downward movement.
Therefore, given the company’s exciting long-term outlook, it may be too late to sell TWTR shares. As a result, short-sellers may be best positioned to wait for a retest of the resistance levels.
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