Twitter Inc (TWTR) Gloomy Hope Prevails as Earnings Mix Emotions

jack dorsey twitter inc TWTR

Twitter Inc   shares plummeted post-earnings despite a better than expected profits for Q2. The primary reason for the decline was the gloomy guidance given by Twitter’s interim CEO Jack Dorsey, who does not expect “meaningful growth” in the monthly active users for “considerable period of time.”

jack dorsey twitter inc looks to Google inc facebook inc

What bullish analysts have to say of Twitter?

Such a mixed performance from the micro-blogging firm has created a sort of split among the Wall Street analysts. Of the 16 analysts following the firm, 8 had a Buy or Outperform rating on the stock while the other eight are Neutral. None of the analysts had a Sell rating on Twitter.

Let’s take a look at what some of the bullish analysts have to say on Twitter. Jefferies analysts are bullish on the “prospects of LT user and engagement improvement” as the firm is constantly improving its product. Analysts are also hopeful from the Project Lightning, which is due this fall, and the unified marketing efforts from the firm. In a recent note, Jefferies gave a Buy rating on stock with a price target of $56.

Separately, Pacific Crest, in a recent report, gave an Overweight rating with a price target of $52. The analysts are positive on the stock in “front of a new direction” noting “Monetisation bulls and user bears have another reason to stay entrenched in this battleground stock.”

Facebook seen as a king of tech industry

Now, let’s see what the neutral analysts have to say on Twitter . RBC analysts are neutral on the firm citing two-fold concerns. The analysts noted it’s unclear if the changes to the product and UI can push the user numbers.

Secondly, citing channel checks and survey, the analysts noted that not many advertisers are getting attracted towards the platform. The analysts are concerned that the platform lacks “real-time commercial intent.”

Barclays analysts, in their recent research note, are advising investors to be patience, noting it may take some time to realize the benefits of the recent product changes.

At a time, when analysts are divided over Twitter  prospects rival Facebook is seen as a top name in the tech industry. Following the last week’s robust earnings from the firm many analysts have hiked their price target on the stock. The platform has gone so much popular that almost one of the seven people on the planet Earth, check Facebook every day.

Year to date, Twitter shares are down over 13% while in the last one-year the shares are down almost 30%. In comparison, Facebook shares are up 19% year to date and 30% in past one-year.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.

Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.


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