Market Overview

SunTrust Explains Twitter User Estimates

Shares of Twitter (NYSE: TWTR) are trending higher after analysts gave estimates for the stock’s monthly active users (MAUs).

Bob Peck of SunTrust sees 277 million MAUs for 2014 and more than 300 million in 2015.

Explaining how the estimates were derived, Peck commented, “Each day, it is estimated that ~2m accounts are registered. This is what we call the gross add number. However, as the Twitter platform has gained critical mass, spam and other activities have increased as well, resulting in a large and increasing percentage of accounts that are suspended in their first few days of operation.”

From here Peck added assumptions about churn, tweeting users and existing users to arrive at the quantity of MAUs.

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The note stated that Twitter does not have to be as big as Facebook (NASDAQ: FB) for the stock to work. Along with having less users, Twitter also monetizes at just around 50 percent of Facebook. Peck sees this rate rising to 70 percent due to, “new product releases, improved targeting and analytics, broader network reach and other enhancements.”

SunTrust’s $45 price target is based on 13 times 2015 EV/Revenue and 60x EV/EBITDA.

Shares of Twitter were last trading 1.02 percent higher at $38.72.

Latest Ratings for TWTR

DateFirmActionFromTo
Sep 2014Canaccord GenuityInitiates Coverage onBuy
Sep 2014UBSUpgradesNeutralBuy
Jul 2014Pivotal ResearchDowngradesHoldSell

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: Bob Peck SunTrust Robinson HumphreyAnalyst Color Analyst Ratings

 

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