Twitter (TWTR) PT Cut to $39 at Nomura Securities; Deceleration in User Growth and Monetization
Nomura Securities analyst Anthony DiClemente reiterated a Neutral rating and slashed his price target on Twitter, Inc. (NYSE: TWTR) to $39.00 (from $48.00) as new guidance implies deceleration in both user growth and monetization pace.
DiClemente commented, "Though Twitter’s 1Q monthly active users (MAUs) were in line with expectations, the lack of visibility surrounding the 2Q15 MAU trajectory indicates a meaningful slowdown, as initiatives that benefited 1Q have not followed through into April. Moreover, organic growth in ad revenue per user is steadily decelerating, mostly due to a lack of ad demand, particularly for direct response ad inventory, which includes app install ads. As such, 1Q revenue came in below our estimates and guidance, and the company materially lowered FY15 revenue guidance. Our key concern for Twitter is the pace of monetization; ad revenue per MAU has decelerated for three consecutive quarters, and guidance implies a further significant deceleration in 2Q15E."
The firm cut FY 2015 EPS from $0.31 to $0.29 and FY 2016 EPS from $1.16 to $0.71.
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Shares of Twitter, Inc. closed at $42.27 yesterday.