UPDATE: Canaccord Genuity Downgrades Twitter, Inc. (TWTR) to Hold

(Updated - July 27, 2016 10:28 AM EDT)

Canaccord Genuity downgraded Twitter, Inc. (NYSE: TWTR) from Buy to Hold with a price target of $16.00 (from $20.00). Analyst Michael Graham characterized fundamentals as "challenged."

"Twitter's Q2 results were mixed but stable with in-line MAUs, slightly light revenue, and an EBITDA beat. Q3 guidance, however, implies ~5% revenue growth with sequentially declining margins while the trends impacting Q3 (lack of advertiser growth, pricing compression) seem likely to carry into Q4," said Graham.

"We recognize we are late to downgrade the stock, and we think downside is fairly limited, but for us the character of the potential turnaround has changed over the past two quarters from 'fix the product and revenue will follow' to 'build a live mobile video business.' While we believe the company has a good chance of achieving this, it will likely take several quarters to know. Twitter could still be an attractive acquisition, and we view this as significant upside risk, but for now we believe fundamentals will be sufficiently challenged to move to the sidelines," added the analyst.

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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