Twitter (TWTR) Analyst Day Provides Optimism - Janney Capital

Janney Capital analyst Tony Wible reiterated a Buy rating and $56 price target on Twitter, Inc. (NYSE: TWTR) following the company's Analyst Day.

Wible comments, "TWTR set some ambitious goals as it aims to have the largest DAU in world with over $14 billion of annual revenue and a 40% to 45% EBITDA margin. The path will rely on new products, better engagement of core users, higher ad load, and efforts to monetize the 500mm non-logged users that are exposed to TWTR each month. Although investors should still be somewhat skeptical, the details on new products and initiatives are encouraging and lead us to be incrementally optimistic."

He highlighted:

New Products and Monetization - we will see new initiatives around Vine, embedded video/photo, geo-targeting, search, timeline improvements, messaging, new event coverage, and a nebulous political product. The goal is to improve the quality of products and to put more relevant products in front of users to boost engagement or improve odds of converting/adding logged-out uniques. Reducing barriers/steps for signup is equally important to dovetail these efforts. We believe video will play a major role as it boosts pricing, is more immersive, adds new functionality, and appeals to a broader ad buyer community.

• Logged Out? - The Street has struggled to understand how these uniques are monetized. Investors should treat this number like a sales lead and audience with potential to respond to new initiatives. The aforementioned products/initiatives may help pull these users into the ecosystem, while Fabric may help monetization for users that remain outside. Its modules are already very popular having processed 55bn app crashes, 170bn ad deliveries, and 2tn app events in the past 30 days. Ubiquitous appeal may help TWTR get embedded into more mobile apps to improve reach. In one case, 892 retweets amounted to 24mm offsite impressions. TWTR is not currently monetizing offsite impressions, which we see as a large opportunity.
• Unique - FB comparisons were addressed. The greater time spent on FB was seen as irrelevant to ad buyers. While FB remains a marquee platform for targeting, TWTR showcased many unique ways it targets based more so on evolving realtime interests than a demo. Its ads can also target on keywords, simultaneous TV viewing, and geo-location that is more relevant for realtime products.
• Path to $11bn - TWTR highlighted that an increase in ad load (1.3% going to 5%), MAU (284/560mm), engagements (48%/51%), and monetization of non-logged users would add $5bn, $4.6bn, $0.5bn, and $1.3bn of revenue. All these factors are not likely to manifest near term but show multifarious ways to grow.

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 $42.54 yesterday.

You May Also Be Interested In

• Apple (AAPL) announces 'Let Loose,' a special online event to be held in May
• Mangoceuticals (MGRX) Acquires Global Preventive Care Patent Portfolio
• TechnipFMC (FTI) PT Raised to $30 at BTIG