Wunderlich Concerned Over Twitter's Decelerating Fourth Quarter Growth

In a note to clients on Tuesday, Blake Harper of Wunderlich Securities wrote that

reported a solid third quarter results, but concerns remain over the company's fourth quarter performance. The analyst states that Twitter's third quarter revenue was 3 percent more than Harper expected, while EBITDA was 16 percent more than expected. However, Twitter's fourth quarter guidance indicated a decelerating growth in revenue. Twitter's fourth quarter revenue guidance of 81 percent to 85 percent year-over-year growth was slightly below consensus estimates, but higher on an absolute dollar amount. In addition, monthly active users remains a concern to Harper who states that the addition of 13 million users in the third quarter is in-line with consensus estimates, but "only implying growth of six million to seven million in the fourth quarter." Harper adds that Twitter has "designs to address a much larger audience," however the analyst estimates that shares are close to fully valued at 13x EV/S on his fiscal 2015 estimates growing 62 percent year over year. Shares are Hold rated with a $45 price target.