Twitter (TWTR) U.S. MAUs Flat for 2nd Straight Quarter, RBC's Mahaney Highlights
RBC Capital analyst Mark Mahaney reiterated a Sector Perform rating and cut his price target on Twitter, Inc. (NYSE: TWTR) to $34.00 (from $41.00) following results. The analyst said they are more cautious. He notes that U.S. MAUs have been flat at 66MM for two straight quarters, and International MAUs are barely growing.
"TWTR reported better than expected Q3 results but materially lowered its Q4 guidance," Mahaney commented. "Organic revenue growth is clearly decelerating and all-important User metrics are showing almost NO growth. We are more cautious."
Mahaney said the keys to the quarter were: "Soft MAU Results – 320MM was below our 323MM. More important, U.S. MAUs have been flat at 66MM for two straight quarters, and International MAUs are barely growing. User growth is vanishing and engagement trends are uncertain. 2) Continued Revenue Growth Deceleration – Ad Revenue growth (ex-FX) now down to 67%, with O&O Ad Revenue growing only 42%. 3) Margins Seem Stuck – EBITDA Margin on track for 24–25% for four straight quarters, although investment spend is the right call now, we believe."
The firm's '16 Rev reduced 8% to $3.10B and EBITDA reduced 11% to $797MM.
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Shares of Twitter, Inc. closed at $31.34 yesterday.