Trying to determine the value of witter Inc. (TWTR) was perhaps the biggest challenge of 2016. Between doubts about the utility of the platform and the on-going chaos at the company, which lead to 60% of its executives flying the coop, 2016 was a nightmarish year for Twitter. But all is not lost.

Despite the many question marks that still remain, the embattled social media company doesn't have to do much in 2017 to emerge a winner. Twitter just needs to find that niche where it can compel a potential M&A suitor like Salesforce.com, Inc. (CRM) to take another chance. Indeed, that's easier said than done. But with new products geared towards growing its video capabilities, combined with features such as Muted Words, CEO Jack Dorsey has already put turnaround plans in motion. 

Moreover, to the extent Twitter can execute its 8% workforce reduction, which should boost profitability, Twitter can emerge not only stronger in 2017, but also leaner. Plus don't forget, despite prolonged weakness with user growth and engagement, Twitter in October reported better-than-expected third quarter results of 13 cents per share on revenue of $616 million, which topped estimates of 9 cents per share on $606 million in revenue. 

Beyond the top and bottom line beat, including third-quarter profit rising 30% rise year over year, Twitter's average monthly active users grew to 317 million, climbing by 4 million since the second quarter and above estimates of 316.3 million. These modest improvements make Twitter shares, which have traded in a range of $13.73 to $25.25 over the past 52 weeks, an interesting play for 2017.

The stock closed Friday at $16.30 and is currently priced at a forward P/E ratio of 26, based on fiscal 2017 earnings per share estimates of 61 cents per share. While that P/E is above the S&P 500 (SPX) index's forward P/E of about 18, it's also six to eight points below Twitter's average trading multiple for 2016. Plus, the projected 18% rise in earnings per share does not yet factor in what Twitter might gain from its 8% workforce reduction.

In other words, Twitter stock might not be screaming bargain, but the shares only need to rise to $20 to deliver 22% returns, meaning the potential reward is compelling enough for investors with high-risk tolerance to take a chance on.

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