Twitter (TWTR) Attributes EBITDA Upside to Cost Shifting to 4Q; Sterne Agee CRT Remains Neutral
Sterne Agee CRT maintained a Neutral rating on Twitter, Inc. (NYSE: TWTR) following the company's 3Q earnings results. 3Q revenue and EBITDA were 2% and 22%. Management attributed some of the EBITDA upside to costs shifting to 4Q. Monthly Active Users (MAUs) were again light relative to expectations. Revenue of $569.2M compared to consensus of $559.8M.
Analyst Arvind Bhatia commented, "3Q revenue and EBITDA were 2% and 22% above expectations but given the recent pre-announcement of these metrics “at or above upper-end of guidance,” this was largely expected. Additionally, management attributed some of the EBITDA upside to costs shifting to 4Q. More importantly, Monthly Active Users (MAUs) were again light relative to expectations and we think the main reason the stock sold-off in after-hours trading. Under CEO Jack Dorsey’s leadership, investors are hopeful that MAU growth will return as the product becomes easier to use. The launch of Moments will be closely watched in that light. Meanwhile, 4Q revenue/EBITDA guidance is lower-than-expected and indicates slowing growth. Reiterating Neutral."
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Shares of Twitter, Inc. closed at $31.34 yesterday.