NEW YORK (TheStreet) -- Shares of Twitter Inc (TWTR) - Get Report were plummeting, sharply lower by 11.03% to $32.51 in early market trading Wednesday, after the micro-blogging site released its fiscal second quarter earnings results late Tuesday.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says, "They are basically saying that if you want results any time soon, sell our stock."
"I wish we could comply for ActionAlertsPlus.com, but we are frozen," Cramer added.
This morning, analysts at Deutsche Bank cut their price target to $50 from $60, following the company's disappointing user growth figures.
The firm still has a positive stance on the stock, and maintained its "buy" rating.
Analysts think the risk/reward ratio is favorable at current levels.
In its latest quarter, the company earned 7 cents per share on revenue of $502 million.
Wall Street estimates called for a profit of 4 cents a share on sales of $481.13 million, according to analysts polled by Thomson Reuters.
Average monthly active users, a key measures of growth, came in at 316 million in the quarter, compared to the 310 million analysts were expecting, according to CNBC. The figure includes users who access the service through messaging platforms/
However, the number of its core users who sign into the service on the web or its mobile application at least once a month disappointed. The figure grew to 304 million from 302 million in the prior quarter.
Twitter stock closed at $36.56 in Tuesday's regular trading session.
San Francisco, Calif.-based Twitter is a global platform for public self-expression and conversation in real time, where any user can create a tweet and any user can follow other users.
The company generates its advertising revenue primarily from the sale of its three promoted products which include promoted tweets, promoted accounts and promoted trends.
Insight from TheStreet's Research Team:
Twitter is a core holding of Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Here's a snippet of what Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS wrote about the stock:
As previously mentioned, Twitter (TWTR) - Get Report reported second-quarter results last night that modestly beat on revenue and EBITDA, marginally missed on monthly average users (MAUs) and provided guidance that was slightly better than expected.
Initial enthusiasm behind the solid revenue and EBITDA beat quickly evaporated as CEO Jack Dorsey and CFO Anthony Noto offered a surprisingly blunt and candid assessment of the company's near-term user growth prospects, revealing that recent efforts such as Instant Timeline and curated Logged Off experiences have failed to ignite user growth or participation rates.
By the company's own admission, Twitter remains challenging to use and understand for the mass-market consumer. In fact, Noto warned that the turnaround could take "considerable time," noting that the value proposition is still poorly understood, despite high overall awareness of the product.
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Separately, TheStreet Ratings team rates TWITTER INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate TWITTER INC (TWTR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."
You can view the full analysis from the report here: TWTR Ratings Report