Analysts at Morgan Stanley expect Twitter Inc (NYSE:TWTR) to beat 4Q consensus estimates, as current numbers appear conservative. Although near-term earnings revisions may send estimates higher, analysts remain concerned that shares appear to price in a high likelihood of long-term success absent stronger evidence of mainstream adoption.

Twitter Earnings

Twitter results will beat estimates?

Analysts see 4Q13 results beating consensus estimates, which call for total revenue growth of 94% Y/Y, and EBITDA of $23m (+30% Y/Y), as expectations appear too conservative. Although analysts are unsure if management will provide forward guidance, they expect near-term earnings revisions to move estimates higher. Analysts’ estimates call for total revenue of $210m and EBITDA of $12m (5.8% margin), and for ad revenue of $197m to grow 98% Y/Y (US 71% of total, +77% Y/Y). They look for WW ad revenue per thousand timeline views of $1.15 (+36% Y/Y) on 171b total timeline views (+46% Y/Y), and look for US ad revenue per thousand timeline views of about $3 (+38% Y/Y) on about 46b US timeline views (+28% Y/Y, 27% of total timeline views).

Analysts forecast 247m global MAUs (+33% Y/Y, 7% Q/Q), including 56m in the US (24% Y/Y, 5% Q/Q) – comScore measured 65m US multi-screen users in 4Q (+5% Q/Q). They look for 190m WW mobile MAUs representing 77% of Twitter Inc (NYSE:TWTR)’s total WW MAUs.

Analysts look for management commentary to focus on providing insight related to Twitter Inc (NYSE:TWTR)’s user growth and engagement, while discussing new product developments that could drive future revenue initiatives, especially in targeting offline TV ad dollars.

Twitter’s conference call key points

Key Questions for the call: (1) How successful has Amplify been to-date and what are management’s goals to further disrupt TV ad budgets; (2) How has MoPub been integrated into Twitter Inc (NYSE:TWTR)’s overall advertising strategy? What are Twitter’s long-term plans for MoPub?; (3) How does Twitter plan to accelerate user growth and make Twitter more mainstream?