Here's what every major analyst expects from Twitter's second-quarter earnings report

Published Thu, Jul 22 202112:21 PM EDT

High expectations for Twitter continue to build ahead of earnings. The social media giant will unveil its second-quarter results on Thursday after the bell, but the company has a lot to prove, according to analysts. With an abundance of new products and the rebound in advertising, analysts say the company needs to execute in order for the stock to work. Still, shares of Twitter are up 28% this year. Key issues include the impact to Twitter on Apple's changes to how it gets permission to use devices' IDFA . Also known as the identifier for advertisers, the IDFA is a device identifier companies use to target customers on mobile apps or websites. Investors will also be looking for updates on user growth. Here's what analysts expect from Twitter earnings: "We expect solid 2Q21 results," Cowen's John Blackledge wrote. The firm said it expects "accelerating" top line growth but the key for the stock will be the company's third-quarter outlook, according to Blackledge. Meanwhile, Bank of America analyst Justin Post was standing by his buy rating but said the IDFA would likely have a bigger impact on this report than prior quarters. Post said he was hopeful due to robust ad demand and the company's capable line up of products like Mobile App Promotion or MAP which helps advertisers target consumers. "We think [the] stock has benefitted from optimism on new subscription services, while the MAP product ramp remains a big opportunity, so commentary on each will be important for sentiment," he said. Bernstein's Mark Shmulik was also upbeat in his earnings preview note saying that he believed the stock's time in the "penalty box" was over. "The setup for this earnings season appears to be on the up and up," Shmulik said. Others like JPMorgan analyst Doug Anmuth acknowledged what he called a "healthy skepticism" but said he was sticking with his top pick status on the stock. "Industry checks suggest the online ad market remains strong—supporting an increasingly digital economy—and we believe TWTR is benefiting from the return of events & launches, brand advertising ramping, & growth in MAP advertisers including in sports betting, crypto, & investing," he added. Yet for Jefferies analyst Brent Thill, Twitter is still a show-me story. "We are positive on Q2 fundamentals, but elevated multiple and execution concerns keep us on the sidelines," the firm wrote. Bank of America- Buy rating "We think stock has benefitted from optimism on new subscription services, while the MAP product ramp remains a big opportunity, so commentary on each will be important for sentiment. ... .While we didn't get the brand spend recovery we hoped for in Twitter's 2Q guidance, we saw outlook as conservative and think 2H brand strength is possible as events return. Moreover, we see opportunity for multiple new revenue generating products to roll-out this year, and optimism on Spaces and Subscription activity to grow." Bernstein- Market perform rating "Twitter's time in the penalty box was short-lived with the stock recovering most of its' losses after delivering poor results last quarter relative to peers and bullish investor expectations. But the setup for this earnings season appears to be on the up and up. Revenue expectations are once again rising passed management guidance, though there's reason to believe that the company will deliver this time. " JPMorgan- Overweight rating "But into 2Q earnings, we still do not believe TWTR shares are well-owned & healthy skepticism around execution remains. Industry checks suggest the online ad market remains strong—supporting an increasingly digital economy—and we believe TWTR is benefiting from the return of events & launches, brand advertising ramping, & growth in MAP advertisers including in sports betting, crypto, & investing." Piper Sandler- Neutral rating "Items: We are focused on three key things going into the print: (1) progress on monetizable daily active users and revenue guidance given at Investor day in February after missing the Street in 1Q, (2) use of Spaces, Super Follows and other potential monetization avenues for the platform, (3) rollout of new ad products including Launch, and Branded Likes, and (4) updates on partnerships and media strategy given recent acquisitions and consolidation, and (5) the deprecation of Fleets." Wedbush- Neutral rating "We are expecting an inline quarter from Twitter which we continue to believe is the least exposed to the ecommerce advertising tailwinds that are driving digital advertising growth, but should benefit from a continued bounce back in brand ad dollars. ... .The reinvigorated focus is a positive overall, but questions remain around the impact new products can bring to user growth." Cowen- Market perform rating We expect solid 2Q21 results. ... .We expect accelerating 2Q21 top-line growth on easy 2Q20 comp from the onset of the pandemic, where TWTR ad revenue declined 22% y/y. The key at the print will be 3Q21 outlook, impact of iOS 14.5 change and update on TWTR's MAP and DR (direct response) initiatives." Evercore ISI- In line rating We view the Street's $1,064MM Revenue estimate as potentially conservative, given continued strength in Online advertising and the company's own reporting track record, tho the Street's Operating Income estimate appears somewhat aggressive, as it is materially above guidance. We also view the Street's 7MM mDAU Net Adds estimate as reasonably achievable, tho with slightly greater chance of downside variance, given typical seasonality and re-opening headwinds. Jefferies- Hold rating "We are positive on Q2 fundamentals, but elevated multiple and execution concerns keep us on the sidelines. In our view, TWTR is well positioned to beat street rev and mDAU expectations. Our confidence is underpinned by a robust live event slate (e.g. Euro Cup, Olympic Trials, the Oscars, etc.), a resurgence in brand ad spend, and recent checks indicating improving advertiser traction on direct response ad products." Wells Fargo- Equal Weight rating "We expect a relatively strong quarter driven by continued momentum in ad revenue, ongoing growth in key international markets (Japan), and product innovation (ad platform improvements, Twitter Blue) offset by potential mDAU (monetizable daily active users) slowdown amid tougher comps and a return from COVID-19 engagement trends to more pre-pandemic levels."

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High expectations for Twitter continue to build ahead of earnings.