Twitter Inc. (NYSE: TWTR) stock has fallen over 13% in the past month despite rising over 38% in the year so far. Investors remained concerned about the company’s growth prospects due to a fall in the revenue growth rates since the third quarter of 2018.
The younger generations depend on Twitter for real-time news feed while the company relys heavily on advertisement dollars for revenue. The site has seen an improvement in the number of users as the majority of the announcement and observations from the US President Donald Trump is made through his Twitter account daily.
The company’s top line comes from advertisements and through licensing and other sources. The development of artificial intelligence across the globe has been increasing and the AI could transform Twitter into a multi-billion dollar company. However, the transformation could be completed in at least a year or so.
Also, the microblogging service has been facing stiff competition from Facebook (NASDAQ: FB), Microsoft’s (NASDAQ: MSFT) subsidiary LinkedIn, Alphabet’s (NASDAQ: GOOGL) unit Google, and Snap (NYSE: SNAP). News has been the major part of sharing among the users but competitors have been attracting people with an array of products in social networking.
An outage has been a major concern for social networking sites. This week, the regular users of Tweetdeck and Twitter were hit by an outage globally, including Japan, Canada and India. The users experienced a problem in the updation of direct messages or add extra stuff to tweets like images, videos, and polls. Twitter is working on a fix and expect it to be back to normal soon.
Last month, the company has been attracted to the privacy breach problem. The users’ data like email addresses and phone numbers, which was provided for security purposes, may have been inadvertently used for advertising purposes. The company has addressed this issue and it is no longer using phone numbers or email for advertising.
Twitter turned cautious in raising equity at a slow pace instead of the furious pace that was used in the early days. The company is doing well backed by the expansion of free cash flow growth. The company plans to widen its international expansion of live video as there is great potential for additional growth in the area.
The company could face obstacles in the short term for growing its revenue growth rates. However, in the long term, Twitter could be beneficial by its expansion plans in live video and in international growth. The company could highlight additional details of the expansion plans in the upcoming earnings call.