FBN Securities On Twitter: Buy On 'Expected Overreaction'

Analysts reactions to

third quarter results on Monday have been generally mixed. Shebly Seyrafi of FBN Securities' reaction was mostly positive, noting that management's fourth quarter guidance is merely "conservative" and the market's response in punishing shares is an "overreaction," creating an opportunity to "buy on weakness." Twitter guided its fourth quarter advertising revenue per one thousand timeline views to grow by 28 percent to 30 percent from the third quarter. The analyst notes that while this figure does lag the 53 percent quarterly growth in the fourth quarter 2013, it also implies that the metric will grow around 54 percent year over year, down from 83 percent last quarter and 100 percent in the second quarter. Seyrafi adds that Twitter is “being conservative” as International advertising revenue per one thousand timeline views growth has been well over 100 percent and the company's guidance suggest a deceleration in this growth to around 80 percent. Additionally, timeline views per monthly average user is expected to be flat in the quarter, an improvement over the 7 percent decline in the third quarter and 8 percent decline in the second quarter. The analyst adds that Twitter will benefit from an “easy compare” as the metric declined by 3 percent year over year in the fourth quarter 2013. Shares are Outperform rated with a $60 price target.