Twitter Inc. (TWTR) has recently teamed up with major French bank, Groupe BPCE, in hopes of finding new ways of expanding its commerce offerings of its own. The move comes in as Apple Inc. (AAPL), and other companies like Facebook Inc. (FB) eye money transfer payments as a new market, in which there is lots of room to burgeon.

Online payments definitely seems like a good, innovative method for TWTR, as it will push the firm’s revenues forward, and will also allow for more active daily and monthly users, as they will be tweeting their money payments/transfers with friends or others on TWTR. The competition is not just between TWTR, FB, AAPL, Google Inc. (GOOG), but also between major credit card issuers and banks, such as Visa Inc. (V), and MasterCard (MA).

September and so far in October, worldwide markets have been very turbulent, and volatile, and that is due to lots of global concerns, but also due to the oil glut, that is causing oil prices to dip, which has in turn, negatively affected investors’ sentiments regarding equities and ETFs. Could TWTR be a solid stock to hold on to though, despite this large correction?

It is currently a Zacks Rank #3 (Hold), however that is only probably due to the sell-off that has rocked the Dow Jones Industrial Average hard, especially in the last several trading days. Twitter was a Zacks Rank #2 (Buy) prior to the stock market correction, and the social platform’s stock has definitely got a lot of room to grow. This may be especially true if TWTR can get this mobile payment system off the ground and see some traction in the French market.

Details

TWTR users in France will use S-Money, Groupe BPCE’s method for transferring money online, and it has bypassed security issues through not requiring users to show bank details or personal information. TWTR has been good in releasing new products and services, such as Twitter Buy, which enables users to search for their desired items, and buy them directly off of TWTR, so S-Money seems like a great route, so as not to solely rely on advertisements for revenue, however, the online payments market will be tested when Apple Pay debuts later this month.

Nonetheless, TWTR’s earnings in November will indicate whether the company’s recent acquisitions and innovations have harvested fruit. Analysts have revised and upped their EPS estimates for the current quarter (9/2014), however EPS estimates have not really changed from -0.27, and TWTR has not been very good in surprising EPS expectations, as it carries an average surprise rate of -106.40% over the past four quarters.

Additionally, TWTR has had a very volatile year, as it has surpassed the S&P 500 Index’s performance from around August till today, while earlier in the year it was an underperformer. Investors should err on the side of caution till the market settles down a bit, and a more solid social media platform to invest in would be FB, which is currently a Zacks Rank #1 (Strong Buy), or even LinkedIn Corporation (LNKD), which sports a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Read the analyst report on TWTR

Read the analyst report on AAPL

Read the analyst report on EBAY


Zacks Investment Research