Wall Street has been buzzing with excitement as Twitter Inc (NYSE:TWTR), Gilead Sciences, Inc. (NASDAQ:GILD), and Yelp Inc (NYSE:YELP) all posted their quarterly earnings results after market close on July 28. A handful of analysts weighed in on each stock in light of their earnings, some with glowing reviews, and others with disappointment.
Twitter announced their second quarter fiscal 2015 earnings on July 28, revealing both the strengths and weaknesses of the social networking website.
The company raked in $502 million in quarterly revenue, up 60% year-over-year, and above the previously forecast range of $470 million to $485 million. Twitter also reported adjusted earnings per share of $0.07, up from $0.02 a year prior and beating the Street expectation of $0.04.
While investors were initially thrilled with the earnings, sending shares to increase by as much as 12% in after-hours trading, Twitter’s inability to grow its user base quickly became apparent. Consequently, Twitter shares fell nearly 6% after markets closed.
Jack Dorsey, interim CEO of Twitter, acknowledged that while the company’s “Q2 results show good progress in monetization, [he is] not satisfied with…growth in audience.” Dorsey highlighted three key areas where the company has to improve in the coming months: “ensur[ing] more disciplined execution, simplify[ing] [the] service to deliver Twitter’s value faster, and better communicat[ing] that value.”
On July 28, RBC Capital analyst Mark Mahaney maintained a Sector Perform rating on Twitter and decreased his price target to $41 from $47. While Mahaney cautioned that Twitter will have obstacles with competition and revenue streams, he emphasized that the social media site “remain[s] a very sizeable platform with a unique value proposition, strategic significance and great monetization potential.”
Mark Mahaney has on average a 66% success rate recommending stocks with a +23.6% return per rating when measured over a one-year horizon and no benchmark.
On July 29, Axiom analyst Victor Anthony maintained a Hold rating on Twitter with a $40 price target. Anthony relayed his skepticism on Twitter’s ability to “drive the audience growth that investors need to own the stock” and stated that he will retain his Hold rating “until [he] see[s] signs that the marketing efforts to drive user growth show signs of working.”
Victor Anthony has on average a 64% success rate recommending stocks with a +15.3% return per rating when measured over a one-year horizon and no benchmark.
Out of 23 analysts polled by TipRanks, 9 analysts are bullish and 14 are neutral on Twitter stock. The 12-month average price target for Twitter is $44.81, marking a 22.63% potential upside from where the stock is currently trading. On average, the all-analyst consensus for Twitter is Hold.
Gilead Sciences, Inc.
Shares of biotech giant Gilead Sciences surged over 3% in after-hours trading on July 28 after the company exceeded second quarter 2015 earnings expectations by a landslide.
While the Street expected the company to post earnings of $2.70 per share on $7.61 billion in revenue, Gilead far exceeded those numbers, posting Non-GAAP earnings of $3.15 per share on $8.2 billion in revenue. Additionally, Gilead paid its first dividend of $0.43 per share and announced that another dividend of $0.43 per share will be paid to investors on September 29, 2015.
Gilead can attribute its stellar quarter to sales of its hepatitis C drug, Harvoni. Sales of Harvoni reached $3.6 billion, almost 44% of the company’s total revenue. Sales of the company’s HIV line also performed well as Truvasa increased 5% year-over-year to $849 million and Stribild sales jumped over 65% to $447 million.
Gilead also raised its full-year 2015 revenue guidance for the second time this year from the range of $28 billion to $29 billion up to a range of $29 billion to $30 billion.
J.P Morgan analyst Cory Kasimov weighed in on Gilead Sciences on July 28 in light of the company’s impressive quarterly earnings, reiterating an Overweight rating on the stock. The analyst notes that “the HCV franchise drove the top-line with $4.9B in total sales, easily surpassing consensus of $4.4B,” which “has become the norm.”
Cory Kasimov has rated Gilead 10 times since 2010, earning a 90% success rate recommending the stock and a +12.0% average return per GILD recommendation when measured over a one-year horizon and no benchmark. Overall, he has a 57% success rate recommending stocks and a +13.1% average return per recommendation.
Piper Jaffray analyst Joshua Schimmer also maintained an Overweight rating on Gilead on July 29 in response to the company’s Q2 earnings report. The analyst raised his price target on the stock from $131 to $134, citing that the company’s hepatitis C franchise continues to exceed expectations. Additionally, the Schimmer anticipates the company to pull off a “transformative transaction” to increase long-term growth.
Joshua Schimmer has rated Gilead 11 times since 2012, earning a 90% success rate recommending the company and a +17.2% average return per GILD recommendation when measured over a one-year horizon and no benchmark. Overall, he has a 61% success rate recommending stocks and a +12.9% average return per recommendation.
Out of 14 analysts polled by TipRanks, 13 analysts are bullish on GILD and 1 is bearish. The average 12-month price target for Gilead is $118.54, marking a 4.84% potential upside from where the stock is currently trading. On average, the all analyst consensus for Gilead Sciences is Moderate Buy.
Yelp, which publishes crowd-sourced reviews about local businesses, announced their second quarter fiscal 2015 earnings results on July 28, disappointing investors with a net loss.
The company posted a net loss of $(1.3) million, or $(0.02) per share, compared to a net income of $2.7 million, or $0.04 per share in the same quarter of last year. Yelp posted revenue of $133.9 million, reflecting a 51% growth from the same quarter a year prior.
Yelp CEO Jeremy Stoppelman reflected positively on the quarter by emphasizing his belief that the company’s “rich content married with [its] highly-differentiated local advertising product will position [it] well to capture a meaningful share of the large local market.”
On July 29, Raymond James analyst Aaron Kessler downgraded Yelp from Outperform to Market Perform following the Q2 earnings. Kessler cited the company’s net loss paired with the slower local ad market, which Yelp relies on to produce profits, as the reasons for his downgrade.
On average, Aaron Kessler has a 59% success rate recommending stocks with a +19.6% return per rating when measured over a one-year horizon and no benchmark.
Robert W. Baird analyst Colin Sebastian maintained a Neutral rating on Yelp on July 29, lowering his price target to $30 per share.
On average Colin Sebastian has a 68% success rate recommending stocks with a +15.3% return per rating when measured over a one-year horizon and no benchmark.
Out of 23 analysts polled by TipRanks, 9 analysts are bullish, 13 are neutral, and 1 is bearish on Yelp stock. The 12-month average price target for Yelp is $48.18, marking a 43.78% potential upside from where the stock is currently trading. On average, the all-analyst consensus for Yelp is Hold.