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Deep Dive

Philip van Doorn

April 25, 2022, 3:58 p.m. EDT

#RIPTwitter? These numbers show the company has plenty of life

By Philip van Doorn

Sometimes you need to separate your personal feelings from your thoughts about companies and their stocks.

People who loathe Tesla Inc. (NAS:TSLA) CEO Elon Musk — whose April 13 offer to purchase Twitter Inc. (NYS:TWTR) for $54.20 a share was accepted by the target company’s board of directors on April 25 — have been having a ball posting nasty messages under #RIPTwitter.

The deal to take Twitter private is subject to a vote by Twitter’s shareholders and is expected to close this year.

But a review at the S&P 500 (S&P:SPX) communication services sector points to remarkable expectations for the company, even if the deal isn’t completed.

Rapid growth for Twitter, even without Musk

For a look at what would be expected for Twitter if it were to continue to operate as a public company, we have screened the worst-performing sector in the S&P 500 this year: communication services. The sector was down 23% for 2022 through April 22, led by Netflix Inc. (NAS:NFLX) , with a year-to-date decline of 64%. (Twitter was up 13% for 2022 through April 22.)

Great sales expectations

Here are all 23 stocks in the S&P 500 communication services sector, ranked by expected compound annual growth rates (CAGR) for sales over the next two calendar years among analysts polled by FactSet:

Company Ticker Two-year estimated sales CAGR Estimated sales – 2022 ($mil) Estimated sales – 2023 ($mil) Estimated sales – 2024 ($mil)
Take-Two Interactive Software Inc. (NAS:TTWO) 28.6% $3,975 $5,118 $6,571
Twitter Inc. (NYS:TWTR) 19.1% $5,945 $7,222 $8,431
Match Group Inc. (NAS:MTCH) 16.8% $3,519 $4,139 $4,798
Meta Platforms Inc. Class A 15.5% $131,084 $152,913 $175,011
Alphabet Inc. Class A (NAS:GOOGL) 15.2% $302,631 $349,239 $401,542
Activision Blizzard Inc. (NAS:ATVI) 10.5% $8,601 $10,071 $10,504
Netflix Inc. (NAS:NFLX) 9.8% $32,512 $35,551 $39,202
Live Nation Entertainment Inc. LYV 9.8% $14,012 $15,619 $16,887
Walt Disney Co. (NYS:DIS) 9.2% $87,406 $96,433 $104,216
Electronic Arts Inc. (NAS:EA) 7.5% $7,912 $8,480 $9,149
Interpublic Group of Cos. Inc. (NYS:IPG) 5.8% $9,499 $9,869 $10,631
Paramount Global Class B (NAS:PARA) 5.3% $30,588 $32,066 $33,918
Fox Corp. Class A (NAS:FOXA) 3.9% $14,439 $14,886 $15,588
News Corp. Class A (NAS:NWSA) 3.9% $10,340 $10,608 $11,153
Charter Communications Inc. Class A (NAS:CHTR) 3.8% $54,170 $56,239 $58,354
Omnicom Group Inc (NYS:OMC) 3.3% $14,352 $14,826 $15,322
Warner Bros. Discovery Inc. Series A (NAS:WBD) 3.0% $12,611 $12,790 $13,375
T-Mobile US Inc. (NAS:TMUS) 2.9% $80,971 $83,177 $85,749
Comcast Corp. Class A (NAS:CMCSA) 2.9% $122,556 $124,791 $129,765
Verizon Communications Inc. (NYS:VZ) 2.0% $136,935 $139,228 $142,373
DISH Network Corp. Class A (NAS:DISH) 0.9% $17,380 $17,450 $17,687
AT&T Inc. (NYS:T) -1.4% $127,075 $121,924 $123,621
Lumen Technologies Inc. (NYS:LUMN) -4.0% $17,287 $15,735 $15,945
Source: FactSet

Click on the tickers for more about each company.

If you haven’t already done so, you should read  Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

The estimates are for calendar years, because not every company’s fiscal year matches the calendar.

Twitter ranks second on the list for expected sales growth through 2023, even though only 11% of analysts polled by FactSet rate the shares a “buy” or the equivalent.

Rapid earnings growth expected

Here’s a similar comparison, this time sorting the components of the S&P 500 communication services sector by expected earnings-per-share CAGR through 2024:

Company Ticker Two-year estimated EPS CAGR Estimated EPS – 2022 Estimated EPS – 2023 Estimated EPS – 2024
Live Nation Entertainment Inc. (NYS:LYV) 124.7% $0.45 $1.49 $2.28
T-Mobile US Inc. (NAS:TMUS) 85.0% $2.74 $6.12 $9.37
Take-Two Interactive Software Inc. (NAS:TTWO) 34.1% $5.76 $7.79 $10.36
Twitter Inc. (NYS:TWTR) 31.7% $0.85 $1.14 $1.48
Charter Communications Inc. Class A (NAS:CHTR) 25.4% $30.55 $37.55 $48.02
Match Group Inc. (NAS:MTCH) 21.8% $2.57 $3.22 $3.81
Walt Disney Co. (NYS:DIS) 19.1% $4.76 $5.91 $6.75
Warner Bros. Discovery Inc. Series A (NAS:WBD) 18.9% $2.23 $2.66 $3.15
News Corp. Class A (NAS:NWSA) 16.9% $0.95 $1.07 $1.29
Alphabet Inc. Class A (NAS:GOOGL) 16.6% $116.48 $137.13 $158.49
Meta Platforms Inc. Class A 16.5% $12.13 $14.35 $16.47
Netflix Inc. (NAS:NFLX) 15.9% $10.93 $12.14 $14.68
Comcast Corp. Class A (NAS:CMCSA) 14.4% $3.54 $3.95 $4.64
Activision Blizzard Inc. (NAS:ATVI) 13.6% $3.58 $4.35 $4.62
Electronic Arts Inc. (NAS:EA) 12.1% $7.37 $8.20 $9.27
Interpublic Group of Cos. Inc. (NYS:IPG) 7.6% $2.67 $2.86 $3.10
Fox Corp. Class A (NAS:FOXA) 7.2% $3.29 $3.51 $3.77
Omnicom Group Inc (NYS:OMC) 6.7% $6.72 $7.15 $7.65
Verizon Communications Inc. (NYS:VZ) 3.7% $5.41 $5.59 $5.82
AT&T Inc. (NYS:T) -0.7% $2.53 $2.53 $2.49
Paramount Global Class B (NAS:PARA) -1.3% $2.76 $2.32 $2.68
Lumen Technologies Inc. (NYS:LUMN) -15.5% $1.42 $1.05 $1.01
DISH Network Corp. Class A (NAS:DISH) -33.6% $2.69 $1.69 $1.19
Source: FactSet

Twitter ranks fourth, with analysts expecting a two-year EPS CAGR of 31.7%. The top-ranked company, Live Nation Entertainment Inc. (NYS:LYV) , is a pandemic recovery play as the concert business resumes.

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