NEW YORK (TheStreet) -- Shares of Twitter (TWTR) - Get Report are down by 12.33% to $16.17 on Wednesday morning, after the company's fiscal 2016 second quarter revenue slightly missed analysts' expectations.
The company reported revenue of $602 million, up 20% year-over-year. However, Wall Street was looking for revenue of $606.77 million for the quarter.
For the 2016 third quarter, Twitter is expecting revenue in the range of $590-$610 million, about 13% below consensus. The lower than expected revenue forecast has investors speculating that ad revenue may start to fall in the second half of 2016, Barron's reports.
Twitter earned 13 cents per share in the period, beating analysts' estimates of 10 cents per share.
Cantor Fitzgerald cut Twitter's stock rating to "hold" from "buy." While Twitter has been pursuing new ad products and partnerships, "it's become more apparent to us that these initiatives may take longer to re-accelerate growth," the firm said.
The stock was also downgraded at Axiom Capital to "hold" from "buy" because three quarters of weak results don't provide confidence in a near-term turnaround.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate TWITTER INC as a Sell with a ratings score of D. This is driven by a number of negative factors, 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: TWTR