Twitter (TWTR) Target Cut to $48 at Susquehanna

February 6, 2014 6:38 AM EST
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Price: $16.52 -0.54%

Rating Summary:
    7 Buy, 36 Hold, 11 Sell

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    Up: 19 | Down: 19 | New: 13
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Susquehanna analyst Brian Nowak reiterated a Neutral rating on Twitter, Inc. (NYSE: TWTR) and lowered his price target from $55 to $48 following Q4 results which showed weak user results.

"TWTR monthly average users (MAUs) grew 9mn sequentially to 241mn in 4Q... 2% (or 6mn) below us and 3% (or 8mn) below the Street," Nowak notes. "This user growth miss is particularly troubling given TWTR should have benefited from more general public/media awareness and/or experimentation around its IPO."

Nowark said the speaks volumes to how Twitter is still in infancy...and has a much more "niche" use case than Facebook or LinkedIn. ". To put it in perspective, FB added 63mn users when it was ~this size in 3Q:09 (almost 7X more than TWTR's growth). Most recently FB added 4X more MAUs QoQ than TWTR in 4Q:13...despite having a user base that is 5X larger than TWTR's. As a final comparison, LNKD was ~the same size as TWTR in 2Q:13 (238mn registered members) and added ~21mn users in 3Q:13 QoQ (~2X more than TWTR)."

Twitter is entering a heavy investment phase on user and advertising initiatives, and we expect near-term profitability to be pressured, so they are lowering '14 EBITDA estimate by 24%, the analyst notes

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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Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

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