Topeka On Twitter: Pullback A Buying Opportunity

Following

third quarter results on Monday evening, shares began plunging in the after hours trading session by more than ten percent as investors found the company's fourth quarter user growth comments as cautionary. Victor Anthony of Topeka Capital Markets defended shares of Twitter on Tuesday morning, noting that any pullback in shares creates a buying opportunity. “Following what was supposedly a break-out second quarter, third quarter, was overall, an in-line quarter, and call commentary on fourth quarter guidance and on implied fourth quarter user growth was cautionary,” Anthony wrote in a note to clients. “For a stock trading at a high multiple, although supported by high growth, an in-line quarter and cautious comments are likely to result in share price volatility.” Anthony adds that Twitter's management is managing the Street's expectations and ad growth and user growth for the fourth quarter are “likely” to surpass guidance. As such, the analyst views any subsequent pullback in shares as a buying opportunity. Shares are Buy rated with a price target lowered to $60 from a previous $63.