Market Overview

Analysts Chime In On Twitter's Earnings Beat

Twitter (NYSE: TWTR) released a major earnings beat on Tuesday.

The company reported $0.02 compared with estimates of a $0.01 loss. User growth and pent up usage thanks to the 6.5 billion impressions that came from the World Cup, renewed interest in the social media website is heating back up.

The company also has been able to capture more monetization through advertising.

Raymond James on Twitter:

"While we are incrementally more positive on Twitter given the improved user metrics in the quarter and solid advertising monetization and outlook"

The research firm also raised it's forecasts for Twitter, bumping up FY 2014 EPS from $0.05 to $0.11 and FY2015 from $0.30 to $0.39
Macquarie noted:

"While the scale is obviously different and future growth initiatives have some differences, we think that the relative valuation play will remain in effect for the foreseeable future"

The research firm highlights the similarities between Twitter and Facebook (NASDAQ: FB) business models and offerings to advertisers as evidence that Twitter will trade relative to Facebook.

Sterne Agee highlighted user growth as a key metric:

"The key metric for the quarter—user growth—was stronger than published sell-side estimates and we believe much stronger than subdued buy-side expectations."

Cantor Fitzgerald stated the bull case:

"What's more important is that the drivers for this growth seem sustainable, implying faster-than-expected growth and margin over time."

Addressing user growth opportunities, Cantor Fitzgerald wrote:

"Twitter's audience is roughly 2-3x the reported monthly active user base when accounting for the 100Ms of users who visit but don't log in.  This "syndicated audience" continues to grow and management sees a large opportunity to remove friction/grow its value proposition to onboard them over time."

Overall analysts are expecting user growth rates to improve which in turn should drive advertising metrics.  

Twitter shares closed Wednesday session up roughly 20 percent to $46.30.

Latest Ratings for TWTR

DateFirmActionFromTo
Nov 2014Morgan StanleyInitiates Coverage onEqualweight
Nov 2014Monness Crespi HardtInitiates Coverage onNeutral
Oct 2014WedbushMaintainsNeutral

View More Analyst Ratings for TWTR
View the Latest Analyst Ratings

Posted-In: Cantor Fitzgerald Macquarie Raymond James Sterne AgeeAnalyst Color After-Hours Center Analyst Ratings

 

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