Twitter Analyst Gets Off 'Negative Bent,' Shares Upgraded By Cantor Fitzgerald
Shares of Twitter (NYSE: TWTR) are trading higher by 1.3 percent to $42.49 in Thursday's pre-market trading after Cantor Fitzgerald upgraded the stock from Sell to Hold and maintained the $45 price target.
Analyst Youssef Squali is encouraged by healthy February unique engagement metrics which should have an impact on first quarter results.
- Unique user growth strongest among peers at +23.9 percent Y/Y to 68.8 million.
- Total time spend increased 61 percent year over year to 8.9 billion minutes.
- On per-user basis, time spent increased 30 percent year over year to 129.9 minutes.
Twitter's 75.3 percent year-over-year ad revenue growth was a “bright spot” from fourth quarter results, and 15 new ad formats, including mobile app install ads, should “bolster monetization by appealing to new advertisers sets,” said Squali.
The recent pullback has made the valuation more reasonable and makes Squali “less negative on the name.”
The early May lock-up expiration “likely to pressure the stock short term,” said Squali. 454.3 million shares will become eligible for sale.
Squali's $45 price target is based on a 5-year discount cash flow model, which “assumes a perpetual growth rate of 4% and a WACC of 12%, consistent with Facebook and other large-cap Internet names...assumes 5-year CAGRs of 56.1% and 91.3% for revenue and EBITDA, respectively.”
Latest Ratings for TWTR
|Sep 2014||Canaccord Genuity||Initiates Coverage on||Buy|
|Jul 2014||Pivotal Research||Downgrades||Hold||Sell|
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