"TWTR remains a controversial stock, not inexpensive and still hotly debated among investors. We are increasingly bullish and continue to recommend accumulating the stock. We expect shares will grind higher through the quarter, driven by increasing comfort in the near term," MKM Partners said.
Analysts believe Twitter has the best modernization expansion story among large cap Internet opportunities. They think the stock can appreciate to more than $150 over four years.
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Analysts highlighted the following upside drivers: user experience improvements and monthly active users growth acceleration, the ramp of video consumption and spending, monetization of non-logged in users and syndicated audience, and MoPub, Fabric and eCommerce opportunities.
TheStreet Ratings team rates TWITTER INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TWITTER INC (TWTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TWTR's very impressive revenue growth greatly exceeded the industry average of 18.2%. Since the same quarter one year prior, revenues leaped by 97.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- TWITTER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TWITTER INC continued to lose money by earning -$0.96 versus -$1.05 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus -$0.96).
- Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.26 is very high and demonstrates very strong liquidity.
- Compared to other companies in the Internet Software & Services industry and the overall market, TWITTER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- TWTR has underperformed the S&P 500 Index, declining 15.66% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: TWTR Ratings Report