Twitter (TWTR, $36.53) estimates upto $250 million loss from FTC complaint

On Monday, Twitter Inc.  said  that a Federal Trade Commission complaint over data security could lead to a loss of up to $250 million for the company.

The social networking company revealed that it received a draft complaint from the FTC on July 28 alleging violations of the company’s 2011 consent order with the FTC and the FTC Act. The allegations are over the company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019. Twitter, mentioned that the matter remains unresolved, and there can be “no assurance as to the timing or the terms of any final outcome”. According to its filing with the Securities and Exchange Commission, it had set aside a $150 million accrual to account for the potential liabilities arising from the data security case.

Twitter estimates that the range of probable loss due to this case is $150 million to $250 million. 

Tickeron's analysis of TWTR:

TWTR's price moved above its 50-day Moving Average on July 06, 2020

This price move indicates a change in the trend, and may be a buy signal for investors. In 33 of 37 cases where TWTR's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 89%.

Current price $36.53 crossed the resistance line at $35.13 and is trading between $39.06 support and $35.13 resistance lines. Throughout the month of 07/01/20 - 08/03/20, the price experienced a +18% Uptrend, while the week of 07/27/20 - 08/03/20 shows a -1% Downtrend.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Indicator is in the oversold zone -- be on the watch for TWTR's price rising or consolidating in the future. At that time, consider buying the ticker or exploring call options.

The 10-day Moving Average for this ticker crossed above its 50-day Moving Average on July 10, 2020, which can be construed as a buy signal, indicating that the trend is shifting higher. In 15 of 17 similar cases where TWTR's 10-day Moving Average crossed above its 50-day Moving Average, the price rose further within the following month. The odds of a continued Uptrend are 88%.

The 50-day Moving Average crossing above its 200-day Moving Average indicates a buy signal, due to the trend repositioning higher. In 3 of 4 cases where TWTR's 50-day Moving Average crossed above its 200-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 75%.

The Aroon Indicator entered an Uptrend today. In 159 of 221 similar cases where TWTR Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 72%.

Bearish Trend Analysis

The RSI Indicator appears to be shifting from an Uptrend to a Downtrend. In 20 of 33 cases where TWTR's RSI indicator exited the overbought zone, the price fell further within the following month. The odds of a continued Downtrend are 61%.

The Momentum Indicator moved below the 0 level on August 03, 2020. Traders may consider selling the ticker, shorting the ticker, or exploring put options. In 59 of 88 cases where TWTR's Momentum Indicator fell below the 0 level, its price fell further within the subsequent month. The odds of a continued Downtrend are 67%.

The Moving Average Convergence Divergence (MACD) crossed below the signal line. In 32 of 42 cases where TWTR's MACD histogram became negative, the price fell further within the following month. The odds of a continued Downtrend are 76%.

Following a 3-day Decline, the ticker is projected to fall further. Considering data from situations where TWTR declined for three days, in 196 of 279 cases, the price rose further within the following month. The odds of a continued Downtrend are 70%.

Fundamental Analysis (Ratings)

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 69%. During the last month, the daily ratio of advancing to declining volumes was 1.8 to 1.

The Tickeron Price Growth Rating for this company is 43 (best 1 - 100 worst), indicating steady price growth. TWTR’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron PE Growth Rating for this company is 54 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Valuation Rating of 56 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.24) is normal, around the industry mean (17.59). P/E Ratio (22.99) is within average values for comparable stocks, (152.67). Projected Growth (PEG Ratio) (0.87) is also within normal values, averaging (2.73). Dividend Yield (0.00) settles around the average of (0.15) among similar stocks. P/S Ratio (7.05) is also within normal values, averaging (4.89).

The Tickeron SMR rating for this company is 76 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is 96 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. TWTR’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock worse than average.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.