Twitter (NYSE: TWTR, $52.36) is scheduled to report earnings today after the close, it’s fifth such report since becoming a publicly traded company
Analysts are projecting $0.04 EPS on revenues of $456.82 million, with strong year over year growth in contrast to the report from on year prior (-$0.03 EPS on $250.49 M in revenue).
TWTR stock has been trending with investors in 2015, having gained over 44% year to date. The stock is trading in a 52-week range of $29.51-$55.99. However, the stock has yet to reclaim recent Oct 2014 high, having just hit $53.49 earlier this month.
Historically TWTR stock has moved sharply on earnings, moving 15.8% on average and rising in 2 of it’s 5 past reports.
TWTR offers weekly options, and this week’s at-the-money straddle is priced around $5.55, therefore implying a below average move of about 10.8%.
Analysts will be looking for active user growth and new ways of monetization. Many are especially optimistic about both going into this report, following Twitter’s acquisition of live video streaming app Periscope for a rumored $100 million.
My Trade: Buy the May Weekly TWTR 55-57 Bull Call Spread for about $0.55
Risk: $55 per 1 Lot
Reward: $145 per 1 Lot
Break-even (stock price at expiration): $55.55
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