Twitter (TWTR): The Yahoo of Social Media - Wedbush

Wedbush analyst, Michael Pachter, reiterated his Neutral rating on shares of Twitter, Inc. (NYSE: TWTR). Although Twitter remains “the place to go” for live broadcast, management appears complacent about the status quo and unfocused on the lack of user growth. Until Twitter is focused on attracting new users, driving increased use by its existing users, and demonstrating its value proposition to people who don’t use the service, the analyst expects it will grow very slowly.

It is widely believed that its service is too complicated and difficult to use for the average Internet user despite multiple changes. The analyst attributes recent share price appreciation to speculation that Twitter may be acquired, but he does not see a clear-cut buyer.

Q2:16 profitability exceeded the Street’s expectations but was driven by cost cutting. Revenue was $602 million, just below consensus of $607 million, with adjusted EBITDA at $175 million, well above consensus of $155 million. Lower-than-expected operating expenses were the primary driver of the adjusted EBITDA upside. Non-GAAP EPS was $0.13, above consensus of $0.10. Guidance was $145 – $155 million.

The price target is slashed to $14.00 (from $20.00).

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 $18.45 yesterday.

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