Twitter Inc. (TWTR) bonds suffered a vicious downgrade at the hands of rating agency Standard & Poor’s on Thursday. It’s the latest setback for TWTR stock, which has been one of the stock market’s highest-profile underperformers in 2014, a year in which TWTR stock is off more than 35%.

S&P Ratings Services, a division of McGraw Hill Financial Inc (MHFI), is considered one of the “Big Three” credit-rating agencies. This is unfortunate for both Twitter creditors and Twitter stock holders, because S&P’s opinion matters — and it’s not very flattering.

S&P rates debt from Twitter’s $1.8 billion bond offering from September at BB-, several notches below the lowest-possible “investment grade” debt.

Whaddaya know, Twitter’s debt is now officially junk — just like its stock. How appropriate.

What Makes TWTR Stock So Awful?

That’s a great question. Without getting too wrapped around the axle, let’s just outline three quick reasons why TWTR stock is a sell:

Profits (or lack thereof): TWTR posted its first profit last quarter … of just a penny per share. “Frame a penny on the wall and alert the press, Ronald, we’re in the black!”

Put the phone down, Ron.

Twitter “earned” a penny per share by non-GAAP (generally accepted accounting principles) standards, which are computed according to the social media company’s own methodology. In the real world, Twitter posted a GAAP loss of 29 cents per share.

Valuation: It’s really easy to notice that TWTR stock is stinking up the junkyard when you start thinking about Twitter’s valuation. Consider this: less than a month ago, TWTR’s market capitalization was about $10 billion higher than Netflix, Inc. (NFLX), an absurdity that Mark Cuban cited in a tweet explaining his bullish thesis on NFLX stock.

Today, TWTR’s market cap is less than $3 billion higher than NFLX, which is still insane considering that Netflix has made money for years and Twitter couldn’t make money without a printing press.

Twitter has no trailing P/E to speak of, because it has no earnings. Twitter is expected to post a profit of 34 cents next year … but the optimism is well baked in, considering TWTR stock is trading at roughly 120 times that figure.

User Growth: How do you think user growth at the micro-blogging site was last quarter? If you guessed “miserable,” you nailed it. In fact, we’ll accept any synonyms, including “depressing” and “horrendous.” InvestorPlace‘s Jeff Reeves touched on this last week:

“TWTR reported lower-than-expected user growth in its earnings, topping out at 284 million monthly users on the quarter. That was up an anemic 4.8% from the previous quarter, with Q3 user growth at Twitter slower even than the 6.3% pace of growth in Q2.

Twitter Inc. has suffered fears for some time that the platform is flatlining, and this earnings report was yet another confirmation of that trend.”

Twitter’s junk bonds are no more promising than its junky stock. Intelligent investors will stay far away from this wreckage.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid.