NEW YORK (TheStreet) -- Shares of Twitter (TWTR - Get Report) are rising 1.75% to $37.75 in pre-market trading on Monday after the company had coverage initiated with a "market outperform" rating with a $49 price target by analysts at JMP Securities this morning.
JMP Securities believes that with its 284 million monthly active users generating 500-plus million tweets per day, Twitter is the real-time web that users worldwide increasingly turn to for instant news and information on most events.
The firm said its positive view on Twitter is based on a high barrier to entry given its global reach, differentiated content, product enhancements, deep advertiser relationships, early days in monetization, and expanding margins.
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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 several weaknesses, 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 generally deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 171.6% when compared to the same quarter one year ago, falling from -$64.60 million to -$175.46 million.
- TWITTER INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This year, the market expects an improvement in earnings ($0.10 versus -$1.05).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 141.66% compared to the year-earlier quarter.
- Despite currently having a low debt-to-equity ratio of 0.43, 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 8.98 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.
- You can view the full analysis from the report here: TWTR Ratings Report