This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Twitter Plunges: What Wall Street's Saying

Stocks in this article: TWTR

SunTrust analyst Robert Peck (Neutral, $50 PT)

"Twitter reported a strong quarter and inline guidance, driven by improving monetization across US and Intl markets. Revenues per TimeLine View accelerated to 78% growth in the US from 73% and 154% Int'l from 140%. However, Monthly Active Users (MAUs) of 255m (inline with our preview and TwopCharts) decelerated a bit further to 25% from 30% growth and TimeLine Views (TLV) per MAU (i.e., engagement) declined 3% y/y in the US and 10% y/y Int'l. While product changes are largely attributable to the engagement metric declines, investors are still looking for signs of traction in new products deemed to accelerate users and attract the general masses."

UBS analyst Eric Sheridan (Sell, $35 PT)

"Over the medium term, we continue to expect Twitter's stock to underperform the market in the face of (what is likely) a multiple quarter transition on user engagement & ad product adoption. In addition, with ~84% of the basic shares outstanding coming unlocked from the IPO on May 6th, we expect Twitter's stock to lag - despite assurances from insiders & some large shareholders that reduces the lockup overhang by about 1/3rd. For the long term, we could see becoming more constructive on Twitter once the stock reflects a more reasonable absolute multiple on forward operating estimates (especially against peers growing at similar growth rates & with higher levels of profitability) and a clearer trajectory of user & advertising growth."

Topeka Capital Markets analyst Victor Anthony (Buy, $60 PT)

"We reckon that we are witnessing Facebook (FB-$58.15:Buy) part two. Instead this time it is faster user growth that investors are seeking rather than faster mobile monetization. Accelerating revenue growth, raised guidance, and a near acceleration of U.S. MAU growth failed to appease investors, who are demanding TWTR show a
faster path to achieving mainstream status. We are optimistic that TWTR should reaccelerate growth at some point this year. Our 2015 EBITDA estimate increases by 17%, however our price target reduces to $60 from $70 on a reduction in our target multiple. We are stubbornly sticking with our Buy rating and see improvement in investor returns as user growth strengthens."

Cantor Fitzgerald analyst Youssef Squali (Hold, $40 PT)

"Twitter's second quarterly P&L results post IPO were ahead of consensus estimates, however, similar to 4Q13, both MAUs and engagement (two critical drivers of long-term growth) came in weaker than expected. While monetization continues to impress, slowing MAU and Timeline Views growth, the imminent lock-up expiration of some 454.3M shares (80% of shares outstanding), and a lofty valuation still (16.7x EV/ Revenue) keep us on the sidelines. We're lowering our PT to $40 from $45."

Deutsche Bank analyst Ross Sandler (Buy, $52 PT)

"Twitter reported 4% and 96% upside to consensus revenue and EBITDA, but similar to the reaction to FB's 1Q, fundamentals don't seem to matter in the current environment for high-multiple consumer internet. The company continues to execute near-flawlessly around items in its control like revenue and expenses, but sentiment remains pinned on lackluster MAU growth, despite improvement in sequential net-adds. Like FB's late 2012-early 2013 "rough patch" we believe sentiment will eventually shift away from solely MAUs toward revenue and EBITDA growth, but timing is hard to predict (and clearly not right now) and we want to be there given the low institutional. Maintain Buy."

Sterne Agee analyst Arvind Bhati (Neutral)

"1Q results were mixed. Revenue and adjusted EBITDA exceeded expectations while monetization was in line. User metrics, including reach and engagement, improved sequentially but less than the Street expected. 2Q guidance is essentially in line with consensus and full-year guidance was raised to reflect 1Q outperformance."

>>Also See: Twitter Plunges: Q1 Live Blog

>>Also See: Twitter Drops Sharply As User Growth Continues to Slow
-- Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs