Stifel: The Good & Bad For Twitter's Advertising Business
Twitter (NYSE: TWTR) was resumed at Stifel Nicolaus with a Hold rating and $44 price target.
Analyst Scott Devitt notes that advertising revenue has increased during three of the past four quarters. There may be more upside: “We believe increased uptake of complementary TV campaigns along with emerging formats like mobile application install ads could lead to revenue outperformance in the short-term.”
In addition, advertising through MoPub and TapCommerce could boost reach while limiting inventory concerns.
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User engagement and growth are slowing, which raises concerns about ad inventory.
“We believe product innovation driving improved reach / usage of the site may be necessary for Twitter to justify its current valuation.”
The $44 price target was derived with a DCF and, “represents 14x 2015E EV / Sales and 66x 2015E EV / EBITDA.”
Shares of Twitter were last trading at $43.94, up 0.3 percent.
Latest Ratings for TWTR
|Dec 2014||Oppenheimer||Initiates Coverage on||Perform|
|Dec 2014||Pivotal Research||Upgrades||Hold||Buy|
|Dec 2014||Evercore ISI||Maintains||Buy|
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