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Twitter Earnings Preview: What Wall Street's Expecting

Cantor Fitzgerald analyst Youssef Squali (Hold, $45 PT)

"We expect TWTR to report very strong results on Tuesday, 4/29, with total revenue growth of ~115% Y/Y and ad revenue growth of ~128%, primarily driven by improving monetization. That said, user growth (MAU) and engagement are top of mind, since MAU growth decelerated ~900bps in 4Q:13 (to +30% Y/Y) and total timeline views dropped 7% sequentially despite a seasonally strong 4Q. While TWTR remains a key play on growth in Social Internet, the current valuation and imminent lock-up expiration of IPO shares keep us on the sidelines."

Bank of America Merrill Lynch analyst Justin Post (Underperform, $40 PT)

"Twitter reports 4/29 and based on advertiser commentary and FB results, we expect a modest beat vs our and the Street's estimates ($242mn/-$0.03) driven by ad format improvements and sales initiatives. Top 1Q metrics are likely user and ad revenue growth; the Street will likely focus on y/y growth trends vs 4Q. Twitter has made a lot of recent site improvements, and commentary on site changes, new ad format/ad targeting capabilities and outlook for 2Q revenue growth most important for call, in our view. Given the recent negative market reaction to FB (big beat), P and AWAY's 1Q results, we remain cautious on valuation."

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MKM Partners analyst Rob Sanderson (Buy, $72 PT)

"The issue for TWTR is not in attracting new users. New activations are very strong. The company needs to improve accessibility and retention of new user signups. This has never been a focus for the company. User growth has just 'happened' for TWTR to date - this says a lot about the underlying value proposition. Our proprietary survey results suggest a strong underlying value proposition for users that get over the learning curve and fixable issues for those that do not.

Management has identified several factors for improvement from on-boarding to managing interest lists to overall user-experience. They are confident that small improvements in new user retention will lead to meaningful improvements in user growth. Management has set expectations for metrics to turn gradually through the year."

Topeka Capital Markets analyst Victor Anthony (Buy, $70 PT)

"Twitter is scheduled to report 1Q14 results today post the market close. The consensus revenue and EBITDA estimates look reasonable and we expect Twitter to exceed those
estimates. Investors will zero in on the monthly active user growth number and timeline views/MAU, the latter metric, we believe, holds less relevance given the product changes. We believe active user growth will take time to accelerate so we are not expecting acceleration to occur this quarter. The lock-up expiration next week will likely add to the volatility in the stock. Moving beyond 1Q14, several monetization initiatives launched over the past several weeks, and more to come, should help drive revenue and EBITDA growth. We are maintaining our Buy into the print but we believe the stock is likely to be volatile due to user growth issues (solvable, in our view)/lock-up/typical late spring-summer lull for Internet stocks/overall swoon in Internet stocks."

Sterne Agee analyst Arvind Bhatia (Neutral, No PT)

"We expect LNKD to exceed its 1Q'14 guidance, as well as consensus revenue/adjusted EBITDA expectations. With shares down 32% year to date and 40% in the last six months even as estimates have largely increased, the stock's valuation is beginning to look attractive. However, we think in the near-term investors are likely to remain focused on the issue of potential deceleration in top-line growth."

--Written by Chris Ciaccia in New York

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