Twitter Stock Impresses Investors with Brazil Numbers

TWTR StockTWTR Stock Finds a Silver Lining in Brazil

Twitter Inc (NYSE:TWTR) stock has not had the best of starts to the new year, and management is pulling out all the stops to keep the blue bird flying high.

The Twitter transformation is still underway and, while all the change in strategy may take some time, here comes a piece of good news, which is something TWTR stock badly needs at present.

Twitter has found some solace in Latin America’s largest economy, Brazil. Twitter’s advertising revenue rose about 30% in the country, as told by the company’s top executive in Brazil. “Brazil is a motor of growth for Twitter, both in users and in revenue,” said Fiamma Zarife. (Source: “Olympics, smartphones push Twitter revenue up 30 percent in Brazil,” Reuters, February 22, 2017.)

This good news comes despite the slowing down of the Brazilian economy over the last two years.

Advertisement

A surge of interest in real-time marketing around the Olympics, held in Brazil country last August, was instrumental in bringing new customers to the platform. Twitter’s user growth continues to rise with the increase in smartphone usage in the country. In the company’s fourth-quarter results, the growth in monthly active users (MAU) globally went up by four percent. But, in Brazil, the MAU soared by 18%. Zarife is optimistic that both user numbers and advertising will rise with the company’s focus on video and live events.

Even Jack Dorsey is bullish on TWTR stock right now as he bought shares worth $7.0 million last week. Twitter stock had jumped on his confidence, but could not stay high for long amid the concerns surrounding future growth.

TWTR Stock Follows the Decline in Twitter Revenue Growth

Twitter had phenomenal years in 2013 and 2014, when its revenue growth jumped by more than 100%. However, things started to take an ugly turn when this growth almost halved in the year 2015 and was just 14% last year. The problem arises from the social media company’s inability to monetize its user base better. 

Twitter (TWTR) stock has always had to face tough comparisons with Facebook Inc (NASDAQ:FB), which is still growing by leaps and bounds. And things are expected to get tougher when the new entrant in social media—Snapchat parent Snap Inc. (soon-to-be NYSE:SNAP)—will be competing for more ad dollars.  

Twitter Revenue

(Source: Twitter SEC Filings, last accessed February 24, 2017.))

However, the company’s management is confident that in this year, Twitter will become a safer platform and will gain from the new product areas such as live streaming video. TWTR stock got a boost last year on the news of the company’s potential acquisition, but everything fizzled out in the end. With the changes taking place currently, investors in Twitter stock may stand to gain if there is some new buying interest in the company in 2017. At the moment, the Brazil numbers cannot help the stock from sliding further.