In the almost-four months since I referred to Twitter Inc (NASDAQ:TWTR) as the “next MySpace” for its niche appeal that offers little to investors, TWTR stock gained 40% on positive non-GAAP earnings and declining costs.

The preferred communications channel of the 45th president has again started growing its user base. However, as investors factor in lower revenue and negative publicity, Twitter stock appears to be one to avoid going into the Feb. 8 earnings report.

Expect another report of positive earnings and falling revenues

Nobody questions that TWTR got a huge boost from its October 2017 earnings report. Yet, Twitter has lost money since its 2013 IPO. So, investors treated the visible path to profitability as welcome news. Moreover, the rise in monthly active users (MAUs) provided welcome relief as that number fell in the previous quarter. Also, the company has benefited from the leadership of Jack Dorsey. While Dorsey also runs Square Inc (NYSE:SQ), he has helped Twitter prosper against much larger rivals.

Still, even in that report, the company reported lower sales. And that falling revenue trend will continue if consensus estimates hold up. For fourth quarter 2017, analysts forecast just over $686 million in revenue. This is down from $717.2 million from Q4 2016. For earnings, analysts forecast a profit of 6 cents a share. The company reported a 3-cent loss in the same quarter last year.

The revenue numbers hold the key to the future of TWTR stock. The celebrity and political engagement attracts users. However, management has yet to figure out a way to fully monetize this user base or find an interested buyer to takeover Twitter. Its latest experiment — something they’ve named “Sponsored Moments” — constitute a collection of tweets, photos, and videos related to a theme of choice. Whether this strategy boosts ad revenue remains to be seen. Still, analysts forecast about 7% revenue growth in fiscal 2018.

TWTR Stock Offers Little to Investors

To hit that 7% target, TWTR will have to reassure its political user base. With a large number of pols and friends using the site and the character limits within the messages, TWTR provides an efficient medium to express views. However, a perception has taken hold that Twitter itself has positioned itself against the right-of-center.

The company denies this. Still, a feeling of bias lingers and many conservatives have stopped using the site as a result. Whatever the nature of one’s political views, alienating 50% of the political user base when the company struggles to grow MAUs will not likely inspire investor confidence.

Also, even if Twitter stock survives the complaints, the site has developed little traction outside of its political and celebrity niches. Users regard Facebook Inc (NASDAQ:FB) as the dominant social media site. Social media sites like Microsoft Corporation‘s (NASDAQ:MSFT) LinkedIn, Pinterest, the various sites run by Snap Inc (NYSE:SNAP), and the even the once-popular MySpace (yes, it still exists) are niche sites that offer little to stock investors.

Moreover, given the negative revenue growth, TWTR stock is expensive, trading at 22x cash flow compared with its industry’s 13.2x, according to Morningstar data. Now that the company has achieved profitability, earnings growth will remain in double-digit percentages for the rest of the decade.

Still, analysts forecast earnings of 25 cents a share in 2020. At $26, this means the stock trades at more than 100 times earnings. Analysts have gladly paid more than that for the likes of Amazon.com, Inc. (NASDAQ:AMZN) (234x) or Netflix, Inc. (NASDAQ:NFLX) (213x). However, those companies lead their respective industries. Given its lack of leadership in the social media industry, TWTR won’t get that sort of a premium from investors.

The Bottom Line on TWTR Stock

Investors should expect Twitter stock to report more of the same going into the Feb. 8 earnings report. Analysts predict that profits will hold and revenue will continue to decline. The latter could turnaround in a few quarters.

Yet, growth will appear marginal, and the company will continue to lag rivals such as FB in the social media sphere. For TWTR investors, growth does not appear sufficient enough to sustain higher multiples in the long run.

Twitter remains a great way to engage with popular figures or talk about politics. However, TWTR stock only investors offers a niche website that seems more like MySpace than Facebook.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks.