UPDATE: Citi Starts Twitter, Inc. (TWTR) at Neutral; Analyst Prefers Facebook (FB)
Get Alerts TWTR Hot Sheet
Rating Summary:
10 Buy, 47 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 16 | New: 15
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Citi initiated coverage on Twitter, Inc. (NYSE: TWTR) with a Neutral rating. Analyst Mark May said he likes Twitter's business but he views Facebook (NASDAQ: FB) as a more compelling investment.
"We are initiating coverage of TWTR with a Neutral rating ($53 target) and our thesis is based on five main viewpoints: 1) While TWTR has many of the attractive growth characteristics we like, we believe it’s current valuation already reflects long-term bull-case assumptions for key metrics like user growth and monetization; 2) our proprietary survey suggests an upper limit to Twitter’s user base; 3) the consensus view that TWTR’s current user monetization is less than FB’s is inaccurate; 4) while TWTR’s multiple relative to its growth is lower, we believe FB represents a more compelling investment than TWTR in the online/social media sector; and, 5) while quarterly MAU results are difficult to predict, stock momentum in the last five months could continue near-term as consensus estimates still appear too low," said May.
"While we like the Twitter business, we think FB represents a more compelling investment: 1) FB’s audience is nearly 5x larger; 2) FB’s audience is 5x more engaged; 3) FB’s per user monetization is 50-60% less than TWTR’s, and has more upside potential; 4) FB is currently 3.5x more profitable (and was ~3x more profitable at a similar rev run-rate); 5) FB has greater optionality/upside from WhatsApp, Instagram, Atlas/adtech, etc," he added.
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 $50.70 yesterday.
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