Deutsche Bank Comments on Twitter (TWTR) Q4; 'Great Quarter, Aside From The Most Important Metric'

February 6, 2014 8:42 AM EST
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Price: $17.11 +0.88%

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    7 Buy, 36 Hold, 11 Sell

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Deutsche Bank reiterated a Buy rating on Twitter, Inc. (NYSE: TWTR) and raised its price target to $65.00 (from $50.00). Analyst Ross Sandler called Q4 a great quarter, aside from the most important metric.

"We have consistently stated that there are two camps formed around the Twitter story: 1) the bears who think the product will stay niche and hence shares are dramatically overvalued, and 2) the bulls who believe that TWTR is one of the best positioned companies in mobile, and on its way to 1B users and a much larger market cap. We remain firmly in the latter camp, but admittedly, did not gain any additional confidence in TWTR fixing its "user funnel" problem, despite numerous new initiatives in 4Q," said Sander.

Commenting on negative items, Sandler said, "The MAU deceleration moves the bear case front and center, as TWTR introduced a number of new initiatives in 4Q which didn’t have any impact on growth, further management gave few hard examples of how it plans to change the trajectory in 2014 other than it’s the key focus. This rhetoric is similar to the doubts around FB monetization in late 2012 and early 2013, but admittedly, solving user growth is a much more challenging and new problem that investors have to grapple with going forward."

He added. "We think bears win near term and shares could trade off meaningfully considering the lack of catalysts and upcoming lock-up; we would add to positions in the mid-$40's, commensurate with prior support and +20% estimate revisions."

For an analyst ratings summary and ratings history on Twitter, Inc. click here. For more ratings news on Twitter, Inc. click here.

Shares of Twitter, Inc. closed at $65.97 yesterday.

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